Intraday calls for 29th Sep 2009
+ve sector, scripts : Fertlizers, Pharma, Power, Mahlife,
Videoind,Cipla
BUY DCHL-123 for 132+ with sl 120
BUY GIPCL-113 for 122+ with sl 109
+ve sector, scripts : Fertlizers, Pharma, Power, Mahlife,
Videoind,Cipla
BUY DCHL-123 for 132+ with sl 120
BUY GIPCL-113 for 122+ with sl 109
POSITIONAL
BUY Auropharma-745 for 800+ with sl 720
BUY Marico-91 for 102+ with sl 88
BUY Auropharma-745 for 800+ with sl 720
BUY Marico-91 for 102+ with sl 88
BREAKOUT
BUY Wockpharma-178 for 205+ with sl 172
BUY Wockpharma-178 for 205+ with sl 172
Expected Breakout
BUY DLF-426 above 440 for 490+ with sl 425
BUY Sparc-81 above 85 for 122-140+ with sl 80
BUY ONGC-1157 above 1165 for 1195+ with sl 1155
BUY DLF-426 above 440 for 490+ with sl 425
BUY Sparc-81 above 85 for 122-140+ with sl 80
BUY ONGC-1157 above 1165 for 1195+ with sl 1155
INVESTMENT-5
BUY DAAWAT-73 with sl 55
BUY DIVISLAB-567 with sl 530
BUY DAAWAT-73 with sl 55
BUY DIVISLAB-567 with sl 530
NIFTY FUTURES LEVELS
RESISTANCE
4980
5010
5029
5038
5057
SUPPORT
4957
4941
4931
4913
4901
4882
BuySV ELECTRICALS;BHAGWATI BANQUETS&HOTELS
RESISTANCE
4980
5010
5029
5038
5057
SUPPORT
4957
4941
4931
4913
4901
4882
BuySV ELECTRICALS;BHAGWATI BANQUETS&HOTELS
Strong & Weak futures
This is list of 10 strong futures:
Orchid Chem, IOB, Ranbaxy, Uco Bank, Dr.Reddy, Dena Bank, KFA, HCC, Allahabad Bank & IDBI.
And this is list of 10 Weak futures:
TV-18, Tulip, Finance Tech, Suzlon, MTNL, GVK Power, Triveni, Rural Elec, Indiabulls Retals & Idea.
Nifty is in Up trend
NIFTY FUTURES (F & O):
Above 4980 level, expect short covering up to 5008-5010 zone and thereafter expect a jump up to 5027-5029 zone by non-stop.
Above 4980 level, expect short covering up to 5008-5010 zone and thereafter expect a jump up to 5027-5029 zone by non-stop.
Support at 4941 & 4957 levels. Below these levels, selling may continue up to 4929-4931 zone and thereafter slide may continue up to 4911-4913 zone by non-stop.
Buy if touches 4901-4903 zone. Stop Loss at 4882-4884 zone.
On Positive Side, cross above 5036-5038 zone can take it up to 5055-5057 zone by non-stop. If crosses and sustains this zone then uptrend may continue.
Short-Term Investors:
Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop.
BSE SENSEX:
Higher opening expected. Profit Booking should happen.
Higher opening expected. Profit Booking 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.
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 SV ELECTRICALS (BSE Cash)
Bulls may hold on gains today.
1 Month: Bullish, as per current indications.
3 Months: Sideways, surprisingly going one sided with bullishness.
1 Year: Bullish, as per current indications.
Buy BHAGWATI BANQUETS & HOTELS (BSE Cash)
Something cooking, bulls may hold on gains today.
1 Month: Bullish, as per current indications.
3 Months: Bullish, as per current indications.
1 Year: Bullish, as per current indications.
Buy SV ELECTRICALS (BSE Cash)
Bulls may hold on gains today.
1 Week: Bullish, as per current indications.
1 Month: Bullish, as per current indications.
3 Months: Sideways, surprisingly going one sided with bullishness.
1 Year: Bullish, as per current indications.
Buy BHAGWATI BANQUETS & HOTELS (BSE Cash)
Something cooking, bulls may hold on gains today.
1 Week: Bullish, as per current indications.
1 Month: Bullish, as per current indications.
3 Months: Bullish, as per current indications.
1 Year: Bullish, as per current indications.
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,789.36. Up by 124.17 points.
The Broader S&P 500 closed at 1,062.98. Up by 18.60 points.
The Nasdaq Composite Index closed at 2,130.74. Up by 39.82 points.
Currency markets were closed yesterday for the festival of Dussehra.
Interesting findings on web:
A burst of corporate deal making is giving investors a shot of confidence about the economy.
Interesting findings on web:
A burst of corporate deal making is giving investors a shot of confidence about the economy.
Stock indexes rose more than 1 percent Monday to post their biggest gains in about a month, breaking a three-day slide. The Dow Jones industrial average jumped 124 points, recouping much of what it lost last week.
Large acquisitions from Abbott Laboratories and Xerox Corp. vaulted shares of drug makers and technology companies higher, and the buying spread to other parts of the market as investors hoped that the $6 billion-plus deals could be a sign that deal activity is finally picking up a year after the financial system nearly froze.
Neither merger compares in size to the double-digit billion-dollar deals that took place just two years ago at the height of the buyout boom.
But taken in the context of what has been a merger drought — in the wake of the financial crisis, deal-making is still off by more than 50 percent from last year — the transactions suggest that the most senior ranks of corporate America may now have a more optimistic outlook on the economy than some people thought.
For nearly two years, merger activity plunged along with the markets as executives grappled with trying to understand how best to survive. At this time in 2007, $1.28 trillion in takeovers had been announced; so far this year, only $491.8 billion in deals have been announced, according to Thomson Reuters.
"The psychology has changed. This is sign that things have stabilized," said Boon Sim, Credit Suisse's head of mergers and acquisitions for the Americas, who suggested that deals were a lagging indicator to the stock market. "I don't think the floodgates are opening up," he continued, "but C.E.O.'s are now beginning to say, 'If I don't buy it now, it's only going to get more expensive in the next 12 or 18 months.' "
What Wall Street hasn't seen, of course, is the return of the biggest buyers in recent years — the private equity firms that propelled much of the merger mania during the debt-fueled bubble.
And that may be good news. The big deals announced recently are strategic deals, in which one company buys another to make it an integral part of its business, and they require the buyer to take on mounds of new borrowing to pay for the acquisition.
In contrast, many of the takeovers for the last five years were based on little more than financial engineering, with lax lenders providing low-interest debt to help private equity firms buy companies that they often planned to resell quickly in hopes of pocketing a fast profit. That has left many companies struggling to make interest payments, making it harder for them to invest in new products or more efficient manufacturing methods.
A number of those takeovers are already underwater and some have turned sour. Just one example: Simmons, the mattress maker, was bought by the private equity firm Thomas H. Lee Partners, or THL, in 2003, largely with borrowed money. Last week, THL said that Simmons — whose immense debt burden from the takeover was hampering its prospects — would be put into bankruptcy proceedings and sold. But the sale price for Simmons is so low that bond investors will lose around $500 million.
At Xerox, Ursula M. Burns, the company's chief executive, said that she pursued the deal for Affiliated Computer Services only because she finally felt more comfortable with the performance of her own business. "We're confident that our base business will rebound when the economy does — and in Q2 saw the right trends in this direction," she said. "So, all factors played to our favor. At the end of the day, in tough times, strong companies look to invest in their future."
While the recent mergers may represent a positive sign for the economy, Alexander Roos, a partner at the Boston Consulting Group, is less inclined to believe that we are about to see a burst of activity. In a study to be published on Tuesday, he said, his analysis of a sample of companies in the Standard & Poor's 500-stock index shows that about 20 percent are "predators," ready to take on the risks of a deal, while another 20 percent are "prey."
"We expect a window of opportunity offering attractive takeover prospects to open soon," Mr. Roos said. "We have already seen some of our smarter clients making preparations in recent months."
The greatest concentration of deal-making appears to be in the health care and technology sectors. Warner Chilcott made a $3.1 billion deal for Procter & Gamble's drug business last month, for example, and Dell bought Perot Systems, a technology services company, for $3.9 billion. But deals are also being made in other sectors, like food; Kraft's $16.7 billion unsolicited bid for Cadbury, which was rejected but remains a possibility, is the largest outstanding offer to date.
"If you're healthy, it's a great time to acquire inexpensively," adds Ted Rouse, a head of Bain & Company's global mergers and acquisitions practice. "But it's an awful time for two weak companies to merge."
While the return of corporate mergers may be a good sign for the economy, a bigger question may be whether it is such a good thing for companies. Most deals sound great at the time, but in the end, not all of them work out as well as planned.
Mr. Rouse said, "Before the recession, Bain's research on M.&A. showed that approximately 55 percent of acquisitions failed to deliver expected shareholder returns after one year — worse than flipping a coin. The odds only get worse as the size of the acquisition increases and the target is further from the acquirer's core business."
Let's hope the odds are better this time around.
A resumption of corporate takeover deals would represent an important milepost in the economy's recovery. Companies had grown so worried in the past year that they were hesitant to part with cash and often had trouble lining up financing.
Stocks have surged since March as investors jockeyed to stay ahead of a strengthening in the economy, but the pace of those gains has stirred worries that the market is overestimating the strength of the economy. The willingness of some companies to pursue deals is helping ease some of those worries and reassuring investors that credit is flowing again.
"It's encouraging to all investors when you see companies buy because basically what that says is they're in a more aggressive mode as opposed to being in the fetal position," said Mark Coffelt, portfolio manager at Empiric Funds in Austin, Texas.
But over the last 7 months, investors have mostly used the dips as an opportunity to get back into stocks at lower levels, something that happened Monday, too.
"The two big mergers really hammer home the point that the credit market is improving," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
He said merger news and the recent series of initial public offerings that have come to market go a long way to counter worries that the stock advance is out of pace with the still-sluggish economy.
"These are bullish signs," he said.
"It's always a positive sign when you see companies putting money to work, whether they buy other companies, invest in new plants, (or) buy back their own stock," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.
"With depressed stock prices, like we've had over the past year and a half, a lot of companies will find it cheaper to buy a company than to grow that same type of company organically. It's a more effective way to put money to work sometimes."
"People are finally putting their money where their mouth is," said Thompson Phillips Jr., president of T.S. Phillips Investments. "It's someone in the business ponying up big dollars because they think things are cheap. That's a nice reflection of a particular industry and the market."
According to preliminary calculations, the Dow rose 124.17, or 1.3 percent, to 9,789.36, its biggest gain in more than a month.
The broader Standard & Poor's 500 index rose 18.60, or 1.8 percent, to 1,062.98, and the Nasdaq composite index rose 39.82, or 1.9 percent, to 2,130.74.
The Russell 2000 index of smaller companies rose 14.28, or 2.4 percent, to 613.22.
TRAN3856.9648.25+1.27%
UTIL379.912.91+0.77%
S&P 100491.697.58+1.57%
S&P 400692.7214.41+2.12%
NYSE6939.76116.25+1.7%
NAS 1001724.5930.44+1.8%
Within the S&P 500, technology was one of the leading sectors, up 1.7%. That sector was paced by Cisco Systems (Nasdaq), up 99 cents, or 4.4%, at 23.61, after it was raised to "overweight" from "equal weight" by Barclays.
More broadly, financials were the best sector in the S&P 500, after getting a boost from Morgan Stanley analysts, who forecast declining credit losses for banks over the next 12 to 18 months and said large-cap banks are "largely done with capital repair." Among the gainers, Citigroup shares rose 19 cents, or 4.3%, to 4.57.
Insurers also rallied, with Hartford Financial tacking on 2.78, or 11%, to 28.62.
Bank stocks posted solid gains, with Bank of America up 3.7 percent and Citigroup up 4.3 percent. And insurance-stocks soared: American Express gained 4.1 percent, while Hartford Financial shot up 11 percent.
Goldman Sachs [GS 182.50 3.00 (+1.67%) ] gained 1.7 percent after the brokerage confirmed earlier reports that it plans to recruit up to 200 people for its asset-management business.
Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 979.3 million shares compared with 1.2 billion Friday. It was the lightest day since mid-August. Trading was light as some market participants were out for Yom Kippur, the holiest day of the Jewish calendar. Lower trading volume can skew the market's moves.
Stock gains were broad-based Monday, with 28 of 30 Dow components rising, led by Boeing (BA, Fortune 500), 3M (MMM, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), Johnson & Johnson (JNJ, Fortune 500) and Travelers Companies (TRV, Fortune 500).
The only stocks that didn't gain were IBM (IBM, Fortune 500) and Kraft Foods (KFT, Fortune 500).
Analyst upgrades boosted Cisco, Citigroup and other companies in both the technology and financial sectors.
With Monday's gains, the Dow Jones industrial average held an advance of about 16 percent in the quarter so far, which would make it the index's best such period since the fourth quarter of 1998.
But the end of the third quarter on Wednesday may spur volatility as fund managers engage in what is known as "window dressing" -- when they sell laggards in favor of out performers to spruce up portfolios at quarter's end.
In the last three sessions, the S&P 500 had declined more than 2 percent after rallying nearly 60 percent from the 12-year closing low of early March.
Abbott Laboratories said Monday it would acquire the pharmaceutical business of Belgian chemicals maker Solvay for $6.6 billion, while and Xerox Corp. agreed to buy Affiliated Computer Services for about $6.4 billion.
"This is a very good sign," Peter Kenny, managing director at Knight Equity Markets, told Reuters. "This is a very clear indicator that growth is anticipated in the market."
"The tech sector is going to be one of the first beneficiaries of an economic rebound," Kenny said. "The fact that these deals are in the tech sector is a further piece of the recovery puzzle."
Charlie Smith, chief investment officer at Fort Pitt Capital in Pittsburgh, said some money managers and other professionals are racing to catch up with the market's advance before the third quarter ends on Wednesday.
"The mistake that people are afraid of now versus six months ago is not having enough money in the market," he said. "It's a sentiment swing."
Abbott Labs rose $1.25, or 2.6 percent, to $48.58. Abott's purchase of Brussels-based Solvay gives the company access to emerging markets in Eastern Europe and Asia along with new therapeutic areas such as the fast-growing market for vaccines.
Johnson & Johnson Inc. said it bought an 18 percent stake in Dutch biotechnology company Crucell for $440 million in hopes of developing a universal flu vaccine.
Crucell fell 6.6 percent to $22.13 on Nasdaq, but J&J, a Dow component, was up 1.1 percent at $61.27 on the New York Stock Exchange.
The pharmaceuticals index .DRG climbed 1.3 percent.
Xerox's deal for ACS set off a rally in other information-technology companies. Accenture PLC and Unisys Corp. rallied.
Accenture increased 1.77, or 4.9%, to 37.89, after it was raised to "buy" from "hold" by Citigroup, which said that, while there could be near-term weakness, the management-consulting and technology-services company will expand margins and could beat earnings expectations.
Affiliated Computer jumped $6.61, or 14 percent, to $53.20, while Xerox fell $1.29, or 14.4 percent, to $7.68.
Tech shares got another boost from Cisco Systems Inc., which rose 99 cents, or 4.4 percent, to $23.61 after a Barclays Capital analyst raised his rating on the maker of networking equipment maker as he predicted improved demand from telecommunications companies would boost revenue.
Private equity firm American Securities said it is buying GenTek (GETI) for $411 million in cash. GenTek makes specialty chemicals and engine parts.
Apple Inc (AAPL.O) rose 2.1 percent to $186.15 after China Unicom (0762.HK) said it would sell Apple's iPhone in China, starting in October. France Telecom's (FTE.PA) Orange also said it would sell the product later this year. Apple provided the Nasdaq's top boost, followed by chip maker Qualcomm Inc (QCOM.O), up 2.8 percent at $45.97. The semiconductor index .SOXX was up 2.1 percent.
Dow Chemical Co (DOW.N) rose nearly 5 percent to $26.39 after U.S. antitrust regulators cleared Dow's $1.68 billion sale of Morton Salt to Germany's K+S AG. (SDFG.DE)
Other industrial standouts were U.S. aircraft manufacturer and defense contractor Boeing Co (BA.N), up 3 percent at $53.07, and diversified manufacturer 3M Co (MMM.N), up 1.6 percent at $75.01.
Cabot Oil & Gas rose 1.89, or 5.6%, to 35.58, after the company said it is complying with Pennsylvania regulators' order to halt some work at its wells, and forecast third-quarter production slightly above previous guidance.
Merck agreed to sell CSL Ltd.'s seasonal flu vaccine in the U.S. for a six-year period starting next autumn, getting the drug giant into that sector. Terms weren't disclosed. Merck closed up 78 cents, or 2.5%, at 32.03.
Applied Materials (Nasdaq) rose 40 cents, or 3%, to 13.50. The chip-tool maker was upgraded by Citigroup to "buy," based on emerging opportunities for the company's solar-power business.
Genuine Parts gained 1.01, or 2.8%, to 37.68, as Sidoti initiated coverage of the company with a "buy" rating.
Goldman Sachs said it doubts U.S. steel producers can achieve a $600 per ton hot-rolled coil steel price for October/November delivery, saying supply is returning and could exceed demand near-term. Specifically, it cut Steel Dynamics to "buy" from "conviction buy" on the trend, sending shares down 66 cents, or 4%, to 15.88, on Nasdaq.
Semiconductor-component maker MEMC Electronic Materials lost 54 cents, or 3.1%, to 16.75, as it was cut to "hold" from "buy" by Citigroup, which said checks suggest recent poly production issues are still unresolved.
Tech stocks were mostly higher, with the Nasdaq outperforming the broader indexes, but Research In Motion [RIMM 66.44 -2.47 (-3.58%) ] continued to slide, losing another 3.6 percent, after the company's disappointing results last week.
Kraft [KFT 26.17 -0.36 (-1.36%) ] shares fell following a report in the Observer that the company may launch a hostile bid for Cadbury, valuing the UK confectionary business at around $17.6 billion.
VIX24.88-0.73-2.85%.
Oil,Gold & Currencies:
U.S. light crude oil for October delivery rose 82 cents to settle at $66.84 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $2.50 to settle at $994.10 an ounce.
The dollar rose versus the euro and fell versus the yen.
The yen fell against the euro for the first time in six days as Asian stocks rebounded and before a report forecast to show European confidence in the economy improved, damping demand for Japan's currency as a refuge.
Japan's currency declined against the dollar as Japanese Trade Minister Masayuki Naoshima asked for a probe into how a stronger yen will hurt exporters, stoking speculation Japan may intervene in currency markets. The dollar traded near a two-week high against the euro after European Central Bank President Jean-Claude Trichet said it's "extremely important" to have a strong greenback.
"Economic fundamentals are improving, boosting demand for risk taking," said Koji Fukaya, a senior currency strategist in Tokyo at Deutsche Bank AG. "Japan's policy makers can't just let the yen rise, which will hurt companies' profits and reduce jobs."
The yen dropped to 131.45 per euro as of 9:52 a.m. in Tokyo from 131.06 in New York yesterday. The yen declined to 90.01 per dollar from 89.63 yesterday, when it touched 88.24, the strongest level since Jan. 23. The dollar was at $1.4606 per euro from $1.4622. Yesterday it touched $1.4565 per euro, the highest level since Sept. 15.
The yen declined against all of its 16 major counterparts as Asian shares followed gains by U.S. equities. Japan's Nikkei 225 Stock Average rose 0.8 percent, rebounding from yesterday's 2.5 percent tumble, after the U.S.'s Standard & Poor's 500 Index added 1.8 percent. MSCI's Asian Pacific Index increased 0.3 percent.
Risk Appetite
"Risk appetite has improved because of the big bounce in U.S. equities," said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. "Speculators who have been betting on the yen's strength should probably start reconsidering whether they should still be long on the yen."
The European Commission in Brussels will report today that economic confidence in the euro zone gained to 82.7 this month from 80.6 in August, according to the median estimate of economists in a Bloomberg News survey. That would be the highest since September 2008.
Naoshima asked bureaucrats to investigate the yen's effect on Japanese exporters, Yosuke Kondo, parliamentary secretary for the Trade Ministry, told reporters in Tokyo yesterday.
Fujii Comments
Japanese companies said they can remain profitable as long as the yen trades at 97.33 per dollar or weaker, according to a Cabinet survey released on April 22. Exports account for 12 percent of Japan's economy, compared with 6 percent in the U.S.
The yen pared gains versus the dollar yesterday after Finance Minister Hirohisa Fujii said at a forum co-hosted by Bloomberg that he "never said I will leave the yen to strengthen" and that he didn't necessarily accept gains in the currency.
Fujii earlier said he didn't support a "weak yen," fueling speculation the government won't act to stem the currency's 16 percent appreciation against the dollar in the past year. Central banks intervene in foreign-exchange markets by selling and buying currencies.
Yen Momentum
"The yen's recent gains, fueled by market interpretation of Fujii's comments, are losing momentum," said Masato Mori, senior manager of the business and marketing department at NTT SmartTrade Inc. a unit of Nippon Telegraph & Telephone Corp.
A strong currency reduces the value of overseas profits for Japanese companies. Large Japanese manufacturers forecast the yen would average 94.85 per dollar in the 12 months to March 2010, according to the Bank of Japan's quarterly Tankan survey released July 1.
The dollar rose against the euro after Trichet told lawmakers in Brussels the "solidity of the dollar is very important." The euro reached a one-year high of $1.4844 on Sept. 23, making European exports more expensive.
Bonds:
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.29 percent from 3.32 percent late Friday.
What to expect:
Tuesday brings readings on consumer confidence from the Conference Board and the 20-city home price index from Case-Shiller.
Tuesday is also the one-year anniversary of the Dow's biggest one-day point loss of all time. On that day, the average plummeted 777.68 points, and the broad market knocked out $1.2 trillion in value. The plunge occurred after the House of Representatives rejected the government's then $700 billion bank bailout plan as a number of banks around the globe teetered on the brink of collapse.
TUESDAY: Case-Shiller home-price index; consumer confidence; Fed's Plosser speaks; Earnings from Walgreens
WEDNESDAY: Weekly mortgage applications; ADP jobs report; GDP; weekly crude inventories; Fed's Lockhart speaks
THURSDAY: Personal income/spending; jobless claims; ISM manufacturing index; pending-home sales; construction spending; auto sales; Fed's Bernanke, Pianalto, Lockhart speak
FRIDAY: Sept jobs report; factory orders; Calif. IOUs mature
Asia:
Asian stocks rose, led by oil and technology companies, as some investors bet the MSCI Asia Pacific Index's drop to a two-week low was overdone.
BHP Billiton Ltd., Australia's biggest oil producer, gained 2 percent after crude futures advanced. Taiwan Semiconductor Manufacturing Co. jumped 3.1 percent after a government official said the island may allow Chinese investors to buy stakes in its flat panel and chip industries. Nomura Holdings Inc., which announced a record share sale last week, climbed 3 percent after losing 22 percent in the past three days.
The MSCI Asia Pacific Index rose 0.4 percent to 116.42 as of 10:27 a.m. in Tokyo. The gain snapped a three-day fall of 2.4 percent, which was the longest series of declines since the six days ended July 8.
The drop was "overdone," said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. The MSCI gauge has still risen 65 percent from a five-year low on March 9.
Japan's Nikkei 225 Stock Average climbed 0.7 percent to 10,082.40 as the yen weakened against the dollar and the euro. Stocks gained even as the statistics bureau reported that the country's consumer prices fell at a record pace in August.
Australia's S&P/ASX 200 Index advanced 1.8 percent. New Zealand's NZX 50 Index added 0.7 percent in Wellington. South Korea's Kospi Index gained 0.5 percent.
Nikkei 225 10,104.68 +95.16 ( +0.95%).(08.26 AM IST).
Japan's Nikkei average rose 0.9 percent on Tuesday, with exporters such as Kyocera Corp (6971.T) rebounding after the yen pulled back from an eight-month high against the dollar.
HSI 21024.08 +435.67 +2.12%. (08.28 AM IST).
Hong Kong shares staged a strong rebound early Tuesday to snap out of a four session losing streak, with HSBC Holdings as well as Chinese banks leading the advance following sharp overnight gains on Wall Street. The Hang Seng Index rose 1.8% to 20,950.45, while the Hang Seng China Enterprises Index added 2% to 11,987.90. Shares of heavyweight HSBC /quotes/comstock/22h!e:5 (HK:5 89.40, +2.30, +2.64%) /quotes/comstock/13*!hbc (HBC 57.56, +1.12, +1.98%) gained 2.2%, with Bank of China /quotes/comstock/22h!e:3988 (HK:3988 4.13, +0.10, +2.48%) and Bank of Communications /quotes/comstock/22h!e:3328 (HK:3328 9.61, +0.23, +2.45%) adding 2% each. The rise came in spite of weakness in shares traded on the mainland, where the Shanghai Composite recently dropped 0.2% to 2,759.51.
SSE Composite 2763.53 2764.73 2779.69 2738.65 + 0.04.(08.30 AM IST).
China's key stock index opened little changed on Tuesday, with Yangtze Power (600900.SS: Quote, Profile, Research) rising after announcing the completion of a corporate restructuring, while dealers said trading was sluggish and directionless ahead of a long holiday.
The Shanghai Composite Index .SSEC opened up 0.01 percent at 2,763.764 points after closing down 2.65 percent on Monday, weighed down in part by the prospects of continued heavy supplies of new shares after an eight-day National Day holiday that starts on Oct. 1.
Yangtze Power, the world's largest hydroelectric power generator, rose 0.45 percent to 13.40 yuan after it announced on Tuesday the completion of a take-over of all of its parent company's major assets, including power generators and debt.
State media reported that the restructuring could raise Yangtze Power's earnings per share by 51 percent in 2010.
The index has lost around 7 percent so far this quarter, heading for its worst quarterly performance this year as the China Securities Regulatory Commission pushes a huge number of new shares, including initial public offerings, onto the market.
State media reported on Tuesday that the first set of 10 IPOs on China's planned Nasdaq-style second board had frozen a combined 784.1 billion yuan ($115 billion) in funds for subscriptions. [ID:nSHA318244] ($1 = 6.83 yuan)
Chinese stocks open nearly flat on Tue
Chinese stocks opened nearly flat on Tuesday morning.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,763.76 points, up 0.01% or 0.24 points from the previous closing.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.05% or 5.81 points higher at 11,092.52 points.
Shanda Games raises US$1.04 bln from US IPO.
Cheng Yu-tung cuts stake in Grand T G Gold to 18.95%.
Minmetals Land net profit up 50.76% in H1.
BOC, China Daily sign cooperation agreement.
Taiwan's M2 money supply rises 8.17% in Aug.
VMS Capital buys 85 mln shares of Jackin International.
Shangri-la wins Asia-Pacific's Best Business Hotel Brand.
Bosera Asset to set up subsidiary in Hong Kong.
Airbus to further cooperate with China's aviation industry.
Suning to become sole seller of Whirlpool products in China.
Cental Huijin, CCB cut shareholding in Mingyuan Medicare.
Yanlord Land launches JV for property project in China.
Industrial Securities to submit IPO application.
General manager raises stake in Mudan Automobile.
Guangxi Non-ferrous Metal Group to issue short-term bills.
10 firms to raise RMB 6.9 bln via IPOs on GEM board.
Guangdong Midea to issue RMB 1 bln in short-term bills.
China Unicom to invest RMB 40 bln in Shandong province.
China's auto sales to exceed 1.2 mln in September.
Marks & Spencer to open 2nd China store in Guangzhou.
ABC to go in for listing in Shanghai
Agricultural Bank of China (ABC), the only Big Four bank on the mainland that has yet to get listed, could float its shares on the Shanghai bourse as early as May or June of 2010, China Daily reported Tuesday.
Whether the bank will seek a dual listing in Hong Kong is still under discussion, the newspaper said, citing sources with knowledge of the matter.
The bank would introduce only one strategic investor, which will be a financial institution from within the country, ahead of its initial public offering (IPO), according to the newspaper.
That differentiates ABC from China's other three major lenders, the Industrial and Commercial Bank of China, Bank of China, and China Construction Bank, all of which had brought in several foreign banks as strategic investors before their listings a couple of years ago.
China Life Insurance, the nation's largest insurer, had earlier expressed its keen interest in buying into ABC, making it the top contender for becoming the bank's strategic investor.
As for the underwriters for the long-awaited issue, China CITIC Securities and China International Capital Corporation could very well be the likely choices because the two have been ABC's financial advisors for its restructuring in the past few years.
In preparing for the IPO, the bank received a 19 billion U.S. dollar capital injection from Central Huijin, the domestic investment arm of China's sovereign wealth fund last October, making it 50 percent owned by the latter, the newspaper said.
China's MOC sets conditions on GM-Delphi deal
China's Ministry of Commerce (MOC) issued a statement late Monday saying it would approve U.S. automaker General Motors Co.'s (GM) plan to buy part of parts supplier Delphi Corp, but set conditions on the deal to avoid restricting competition.
The approval came after an anti-monopoly probe by the MOC into the deal last week and negotiations with the two companies over the deal conditions, aimed to avoid exclusion or restriction of competition, according to the statement.
The conditions include a ban on GM and Delphi exchanging trade secrets on Delphi's other Chinese customers, to prevent GM from getting confidential and competitive information.
Delphi should also maintain the timeliness and quality of supplies indiscriminately to the other domestic automakers, at market prices.
The ministry said it had discussed with the two companies its concerns on competition, and GM and Delphi had come up with solutions.
According to a Dow Jones report Monday night, authorities in the U.S. and E.U. had earlier given their approval for the deal, after Delphi, GM's former parts division, received approval from a U.S. court to sell assets to its lender and GM.
The report said this would clear the way for the auto-parts supplier, which operates 17 wholly-owned entities and joint ventures in China and 21 manufacturing sites, to end its four-year stay in bankruptcy.
Under China's anti-monopoly law, mergers and acquisitions that could impact the domestic market must undergo an anti-monopoly review.
Japanese prices post record decline in August
Japanese consumer prices posted their sharpest monthly drop in August since at least 1971, according to government data released Tuesday.
Japan's core consumer price index fell 2.4% in August compared to the same month last year, to 100.1, the steepest drop since comparable data was first gathered in 1971, according to the Ministry of Internal Affairs.
The monthly decline marked the sixth straight for the index, following a then-record 2.2% decline in July.
Core prices in the Tokyo metropolitan area fell 2.1% in September to 99.7, the government said. That also marked the sharpest decline since 1971.
Market Insider: Good Earnings Could Counter October Fears
Wall Street will quickly shift its focus to corporate earnings news once the books are closed on the third quarter this week.
Joe Quinlan, for one, thinks investors are in for some good news. "I'm encouraged that there's a skepticism about the earnings potential for third quarter. A lot of investors are underestimating how productive U.S. companies have become," said Quinlan, who is the chief market strategist at Bank of America Merrill Lynch. "I think final demand is picking up."
Third quarter earnings for the S&P 500 companies are expected to be down 24.7 percent. Many analysts think the bar is higher than last quarter in terms of upside surprises. The quarter wraps up Wednesday, and the earrings reporting season starts with Dow component Alcoa on Oct. 7.
Of the S&P 500 companies, 73 percent saw positive earnings surprises in the second quarter, and the street has been raising estimates ever since. Quinlan said he is in the process of ratcheting up his own estimates for the third quarter. He also expects to hear more encouraging comments on the outlook from corporate managements as they release earnings news.
Stocks were boosted by a spurt of merger and acquisition activity Monday. Xerox [XRX 7.68 -1.34 (-14.86%) ] said its buying Affiliated Computer Services[ACS 53.86 6.61 (+13.99%) ] for $6.4 billion, and Abbot Labs [ABT 48.58 1.25 (+2.64%) ] is buying Solvay's Drug unit for $6.6 billion. About $60 billion in deals have been announced in the last five weeks. Reuters Thomson said there have been nearly $500 billion in deals since the start of the year, but that's down about 40 percent from last year and down more than 50 percent from the 2007 peak of $1.28 trillion.
The return of deal making, however, is a big positive. "It's a sign of business confidence coming back to the market," said Quinlan.
The Dow finished up 124, at 9789, and the S&P 500 jumped 18 to 1962, the best day for stocks since Aug. 21. At the same time, the dollar was firm against a basket of currencies. Oil finished 1.2 percent higher at $66.84 per barrel, while grains and metals were mixed.
Treasuries saw buying on light volume, which drove yields lower. The 10-year was at 3.285 percent, and the two-year was at 0.968 percent. "People are beginning to realize with the twos (2-year note) anchored at about one percent, and the curve breaking above that, a flatter curve is going to be a bull flattening and long rates have to fall," said William O'Donnell, head of Treasury strategy at RBS.
"It took a long time, but people are buying into this whole thing.. as households and banks repair balance sheets, it's leading to a higher savings rate, weaker growth and a lower inflation outlook." O'Donnell said the market was relatively quiet Monday due to the Yom Kippur holiday, the approach of quarter end, and ahead of the Friday jobs report.
Trick or Treat
Just as many investors had expected September to be a terrible months for stocks, there's some trepidation about October, historically a month of volatility and some memorable crashes. "I'm not fearful about October. I think a lot of investment managers are going to put money to work in October to get that performance," Quinlan said.
He said earnings are just one catalyst that will keep stocks positive into the year end. "What I'm telling clients is between now and the end of the year, there's another 5 to 8 percent upside," said Quinlan. He expects the S&P 500 to finish the year somewhere around 1150.
There are other strategists, who believe a pull back is on the horizon and the timing could be October because of earnings reports. Quinlan disagrees. "It could be we start out of the gate with some weak earnings announcements," he said. But he thinks the overall picture from the reports will be that the worst is over and that will help the market.
"I've been surprised in particular by the resiliency of the global economy...the rebound, the synchronized global expansion. It's not just the U.S.," Quinlan said.
"Where we are in the global economy, I thought we'd be first quarter of next year," he said. Another factor that will keep money moving into stocks is the unwillingness of Central Banks to raise rates for awhile.
There is also a large amount of money, sitting in money market funds that could still be invested in stocks. "There's $3.5 trillion U.S. dollars in investor cash sitting on the sidelines," he said.
Quinlan is bullish for now, but he says the market could run into trouble early next year when the resiliency of the recovery is tested. Issues such as cap and trade, health care reform, the growing U.S. budget deficit and unemployment could all worry the market. "You don't want to be cute in terms of trying to time. We're investors, not traders, but we do think there's good momentum upside from now until early next year," he said.
U.S. stocks could also benefit from a rotation away from emerging markets as investors take profits from big moves there and redirect them into relatively cheaper U.S. big cap names.
What to Watch Tuesday
Tuesday's market will be watching the S&P/Cash Shiller Home Price Index at 9 a.m.
Consumer confidence for September at 10 a.m.
There are a few earnings, including drug retailer Walgreen [WAG 34.19 0.51 (+1.51%) ] before the bell, and consumer sensitive companies, Darden [DRI 36.14 0.54 (+1.52%) ] and Nike [NKE 59.00 0.36 (+0.61%) ], after the bell.
The FDIC meets to discussing funding, among other topics. News reports on monday said the FDIC is expected to collect banks' regular premiums early in order to pump up the waning deposit insurance fund.
The Senate banking committee holds a hearing on bank supervision, and the Securities and Exchange Commission holds the first of two days of meetings on short selling.
The Senate Finance committee is back to work on the healthcare bill.
Memories
If you're anxious about the stock market erasing some of its recently won gains, think back a year ago. The Dow finished Sept 28, 2008 at 11,143, and after the House vote on the bank bailout package failed, it finished Sept. 29 down 778 points at 10,365, still above where it is today.
Japan Fujii Says Forex Intervention Possible: Report
Japanese Finance Minister Hirohisa Fujii said on Tuesday that currency intervention is possible in extreme cases, Jiji news reported, his boldest comments so far in curbing speculation that he favors a strong yen.
Fujii also said currency moves have been too one-sided and sudden, according to Jiji, prompting the yen to slide briefly against the dollar.
The yen's surge to an eight-month high against the greenback on Monday has prompted the finance minister to backtrack on earlier comments that he wanted to avoid currency intervention and that a strong yen was good for Japan's domestic demand.
The yen dipped to an intraday low of 90.04 per dollar on trading platform EBS after Jiji reported Fujii's comments, from around 89.88 beforehand.
But the currency pair quickly came back to levels before he spoke.
Japan's currency hit 88.22 against the dollar on Monday, according to Reuters data, the highest level since January.
The yen has been steadily rising this month as Fujii, chosen to be finance minister after voters swept the Democratic Party to power at the end of August, had repeatedly said he didn't see the need to weaken the yen for the sake of the country's exporters and that a strong currency also has benefits.
September Auto Sales Seen Slumping Post-'Clunkers'
U.S. auto sales likely fell in September back to the nearly three-decade lows of early 2009 without government incentives to spur buying, leaving in doubt the timing and pace of a recovery for the battered industry.
Nearly 700,000 new cars and trucks were bought by U.S. customers through the government "cash for clunkers" incentive program from late July through the first three weeks of August, a leap from recession-stunted sales earlier in 2009.
The massive jump in buying versus earlier in 2009 depleted the stores for all the major auto manufacturers, leaving industry inventories at historically low levels.
Major automakers made sharp production cuts due to the economic downturn in general. Chrysler, now under management control of Italy's Fiat, and GM, also broadly halted output around their restructurings in bankruptcy.
The exhaustion of the government incentive program and a dearth of key vehicles at dealerships curtailed activity at many dealerships through the first half of September, but there have been some signs of sales improving late in the month.
"We have started to get little rumblings that maybe the consumer isn't quite so flat on their back, that they have been responding to some of the incentive programs and the fact that leasing is coming back," said Rebecca Lindland, an automotive research director at IHS Global Insight.
Lindland said the General Motors 60-day return guarantee program has attracted consumer attention, Chrysler's return to leasing earlier in September should provide support and other automakers have brought back some incentives. "There are some little tiny slivers of hope," she said.
"There are still a lot of obstacles out there," she said. "I think we are still going to see the hangover from 'cash for clunkers' both in September and almost potentially through the end of the year."
Sales Drop at All Major Automakers
U.S. auto industry sales rose 1 percent to more than 1.2 million vehicles in August from a year earlier under the "clunkers" program, the first time monthly sales pierced the 1 million mark in a year.
However, none of the largest manufacturers are expected to post sales gains in September, and Edmunds has forecast a 23 percent industry sales decline for the month.
Edmunds expects Ford Motor [F 7.49 0.20 (+2.74%) ] to post a 9.7 percent sales drop, GM a 46.1 percent drop and Chrysler a 48.7 percent decline among the Detroit automakers.
Edmunds expects Toyota Motor [TM 80.63 -0.47 (-0.58%) ] to post a 9.7 percent sales decline, Honda Motor [HMC 30.42 -0.23 (-0.75%) ] an 8.3 percent drop and Nissan Motor a 1.1 percent drop among Japan-based automakers.
The August sales gain represented a seasonally adjusted annualized rate of 14.1 million vehicles, but did little to turn the tide on annual sales. U.S. auto industry sales were down nearly 28 percent through August 2009 versus last year.
Global Insight expects U.S. September auto sales to come in at a 9.33 million seasonally adjusted annualized rate, or well below the 12.5 million unit rate from a year ago when credit markets froze in the wake of the Lehman Brothers collapse.
The median forecast for U.S. auto industry sales was 9.5 million vehicles from 41 economists surveyed by Reuters, while J.P. Morgan believes the annualized rate could drop to 8.9 million vehicles — the lowest month since December 1981.
"We continue to believe (the monthly annualized rate) will hover around 9 million through year-end, but we remain confident in a gradual recovery in the first half of 2010 given strong evidence of a bottoming pre-clunkers," J.P. Morgan analyst Himanshu Patel said in a note to clients Monday.
Influential industry forecaster J.D. Power and Associates expects a 9.2 million vehicle annualized sales rate, but believes improving consumer confidence and credit conditions could rebuild retail sales in the coming months.
Employers Cut Back on Layoffs But Still Aren't Hiring: Survey
US non-farm payrolls for September probably fell by the smallest amount in a year—more proof the economy is pulling out of recession—but the jobless rate likely ticked up, according to a Reuters survey.
Employers have sharply cut back on layoffs but hiring has yet to take off, putting a damper on domestic demand. That has left many analysts doubting the economy's recovery from its worst recession in 70 years will be sustainable once the government's various spending programs end.
The survey of 77 economists forecast employers cut 180,000 jobs in September, which would be the smallest amount for any month since August 2008. Payrolls declined 216,000 in August.
The unemployment rate was seen edging up to 9.8 percent, a fresh 26-year high, after rising to 9.7 percent in August. The Labor Department will release the employment situation report for September Friday at 8:30 a.m.
"Everything we have right now is just a temporary recovery because of the end of the inventory cycle and the fiscal stimulus measures," said Harm Bandholz, an economist at UniCredit Markets and Investment Banking in New York.
"Most of the impact will wear off somewhere at the beginning of next year and the question is where will the ongoing support for the recovery come from? Without the consumer there won't be any strong and sustainable recovery."
Analysts expect the unemployment rate to peak around 10 percent either by the end of this year or early 2010.
Labor Market Healing
Non-farm payrolls have snapped back from a trough of 741,000 job cuts in January and analysts reckon there is scope for September's report to come in better than what the market is currently anticipating.
They cite an improvement in employment indicators such as the downward trend in new weekly applications for insured state unemployment benefits during the payrolls survey period.
"We expect a 150,000 drop in nonfarm payrolls in September, the smallest decline since July of last year, just before employment and the economy plunged into the darkest part of the recession," said Chris Low, chief economist at FTN Financial in New York. "At the current rate of improvement in the economy, payrolls are on track to grow by early next year."
The improvement in the labor market will likely be reflected across all sectors of the economy, despite mixed readings in the employment components of some of the regional manufacturing surveys, analysts said.
A pickup in new resident construction projects could see fewer jobs lost in construction, while an improvement in the overall economic picture translates into a moderation in the pace of layoffs in the services sectors.
September's employment situation report will contain preliminary benchmark revisions to payrolls estimates for the 12 months to March 2009. Economists at JP Morgan said it was difficult to estimate the direction the revisions would go.
"Can we estimate whether the March 2009 benchmark revision will be up or down? Not really. We do not have any information yet from state unemployment insurance records on how employment moved between December 2008 and March 2009," they wrote in a note.
September's employment report is expected to show no change in the average workweek, though the rise hourly earnings probably slowed from August. The average workweek closely correlates with overall output and could shed light on when firms will start hiring.
The average workweek is expected to be steady at 33.1 hours in September. Average hourly earnings were expected to rise 0.2 percent after increasing 0.3 percent in August.
A Double-Dip Recession?
In talking with several international leaders last week, it was clear that, while they are pleased with recent economic stability, they are concerned about how sustainable the recovery is.
As Canadian Prime Minister Stephen Harper told me, much of the current growth is due to stimulus measures from the world's governments. He would like to see government leaders start thinking about an exit strategy to scale back these measures and return to growth led by the private sector.
If an exit strategy is not executed properly, one possible scenario is the "double dip," which would involve the economy resuming growth but then falling back into recession. This is not expected to happen immediately, but it's being talked about more and more, and I wanted to share with you what I've been hearing.
"A Real Danger"
One economist who believes the double dip is a "real danger" is Martin Feldstein, professor at Harvard University and the former head of the Council of Economic Advisors under President Ronald Reagan. Like Harper, Feldstein told me that the current economic upturn is being "force fed" by government stimulus and not driven by the usual business cycle in which growth begets more growth.
At some point, the stimulus programs have to end – be it Cash for Clunkers (which is already over), tax breaks for home purchases or historically low interest rates.
We talked in last week's Investor Brief e-letter about the critical challenges facing the Fed and interest rates. Feldstein believes there will also be political pressure to keep rates low because unemployment is expected to remain a problem in the early stages of recovery. However, keeping rates too low for too long would lead to inflation.
Other reasons Feldstein sees potential danger include the stalling of financial reform as the administration focuses on healthcare, the burgeoning federal budget deficit with little talk of how to bring it back to more normal levels, and "the real disaster" looming in commercial real estate. (You can see my conversation with him here.)
"Not Terribly Worried"
Larry Fink, chairman of BlackRock, which manages more than $1 trillion, isn't as concerned. He told me he understands the threats but believes they are not immediate and that the Fed and government will have time to manage them.
"The double dip, in my opinion, is not through inflation," he said. "I don't see that at all. I think inflation could be a problem out two or three years, but I'm not terribly worried about that at the moment… I'm not frightened of known issues that we can look at out on the horizon. We have time to manage it."
No matter which side you come down on, the economic recovery's sustainability is dependent on the government's ability to unwind massive stimulus efforts in the right way and at the right time. I expect this to be the key question facing the economy, the stock market and investors in the coming months, and you can be sure we will follow it closely.
U.S. Fed May Wait Too Long to Raise Rates, Hanke Says
The U.S. Federal Reserve may keep its benchmark interest rate at a record low for "too long," increasing pressure on the dollar to weaken, said Steve Hanke, a professor at Johns Hopkins University.
Fed Chairman Ben S. Bernanke and other policy makers may hold off increasing rates until after the mid-term Congressional elections in November 2010, as inflation stays within the central bank's target range, Hanke said in an interview in Kuala Lumpur late yesterday. The U.S. economy will probably slow once rates are increased, resulting in a W-shaped recovery, he said.
Fed policy makers indicated last week for the first time in more than a year that the economy is accelerating, while recommitting to keep their key rate "exceptionally low" for an "extended period." The majority of policy makers consider a longer-run inflation rate of about 2 percent to be consistent with the Fed's mandates for full employment and price stability.
"If you look at what the Fed is saying now, and you look at Bernanke's inflation-targeting mentality, they won't do much as long as the headline inflation rate stays in that zone of zero to 2 percent," Hanke said. "It's conceivable they'll wait too long and they'll probably keep as loose as they can before the elections. 2011 would really be way too late."
The U.S. faces the possibility of becoming "trapped" in a situation with low levels of inflation and interest rates near zero, Fed Bank of St. Louis President James Bullard said Sept. 25. He doesn't vote on rates this year.
The W Scenario
The Fed, in a statement after its Sept. 23 policy-setting meeting, said "inflation will remain subdued for some time." Consumer prices fell 1.5 percent in the year ended in August.
"The economy is coming back, and as it starts coming back, we're going to have inflation in the picture," said Hanke, professor of applied economics at the university in Baltimore. "As we have more and more inflation, ultimately, the Fed will probably start fighting it and when they do, it's going to tip us into another slump. That's the W scenario."
The U.S. needs to adopt a policy for a "strong and stable dollar" to ensure sustained economic growth and attract investment, Steve Forbes, chief executive officer of Forbes Inc., said in an interview in Kuala Lumpur yesterday. The trade- weighted Dollar Index has fallen 11 percent since President Barack Obama's inauguration in January, in part because of a budget deficit projected to rise to $1.6 trillion this year as the government increases spending to boost the economy.
'Complete Disaster'
The dollar's decline will increase commodity prices, contributing to inflationary pressures, Hanke said. A stronger dollar limits investors' need for physical assets such as commodities to hedge against inflation.
"This is a complete disaster because the Fed wants to keep inflation up between zero and 2 percent but as long as they are in that zone, they just don't care what happens to the dollar," he said. "If you have a weak dollar, you have all sorts of problems and knock-on effects related to it."
Hanke is recommending investors go "long" the Indonesian rupiah and the Australian dollar versus the U.S. currency, calling them "good" carry trades. A long position is a bet that a currency will strengthen. The carry trade uses funds in countries with lower borrowing costs to invest in those with higher rates, allowing investors to pocket the difference.
He also suggests going long on the euro against the pound after Bank of England Governor Mervyn King said last week that the decline in the sterling's value will help to rebalance the U.K. economy by shifting resources into exports.
Avoid Yuan Gain
"The pound will stay under more pressure," Hanke said. He is in the Malaysian capital for the three-day Forbes Global CEO Conference, which started yesterday.
Hanke said China should avoid allowing its currency to strengthen, calling a resumption of gains "bad policy" and "destabilizing."
The yuan appreciation "will just do the same thing that it did the last time," Hanke said. "The speculative flows will start coming in and they'll have more problems than they'll know what to do with. They'll have to accumulate even more reserves and get more China-bashing from the U.S. It's very destabilizing if they start doing that."
INVESTMENT VIEW
Abbott Labs: Another Mega Merger On The Way, This Time With Solvay
Abbott Labs: Another Mega Merger On The Way, This Time With Solvay
Shares of Belgium conglomerate Solvay climbed higher in European trading on reports that U.S. partner Abbott Laboratories offered at least $6 billion for the company's drug division.
The Wall Street Journal reported that Abbott made an offer between $5.9 billion and $7.4 billion for Solvay Pharmaceuticals, citing people familiar with the deal. Belgium drugmaker UCB is also considering a bid, according to the Journal. A bidding war between Abbott and other drugmakers could help Solvay reap a higher price for its drug business, which was put up for sale in April.
Abbott already holds U.S. marketing rights for Solvay's Trilipix and TriCor, drugs which raise "good" HDL cholesterol while reducing triglycerides and "bad" LDL cholesterol. A company spokesman declined to comment on the reported offer, but said Abbott has laid out a strategy for growth based on small to mid-size acquisitions.
In the last year Abbott of North Chicago has acquired contact lens maker Advanced Medical Optics, India-based Wockhardt's nutritional business, eye care company Synchrony and Evalve, a maker of heart repair equipment.
(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.)
FUNDS DATA
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 25-Sep-2009 | 2101.97 | 2139.69 | -37.72 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 25-Sep-2009 | 1175.86 | 948.6 | +227.26 |
SPOT LEVELS
 | 4958.95 | ( -0.55 %) | -27.60 |  |
| 1 | 2 | 3 | ||
| Resistance | 4991.78 | 5024.62 | 5054.88 | |
| Support | 4928.68 | 4898.42 | 4865.58 | |
 | 16693.00 | ( -0.53 %) | -88.43 | | |
| 1 | 2 | 3 | |||
| Resistance | 16798.94 | 16904.88 | 16997.74 | ||
| Support | 16600.14 | 16507.28 | 16401.34 | ||
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Arvind Parekh
+ 91 98432 32381
