INTRADAY calls for 24th Aug 2009
BUY CMC-864 for 880+ with sl 855
BUY BHEL-2301 for 2350+ with sl 2286
BUY AIAEng-256 for 273+ with sl 251
BUY CMC-864 for 880+ with sl 855
BUY BHEL-2301 for 2350+ with sl 2286
BUY AIAEng-256 for 273+ with sl 251
Breakout calls
BUY HeroHonda-1482 for 1650+ with sl 1450
BUY ONGC-1191 for 1250+ with sl 1175
Positional
BUY ENIL-207 for 240+ with sl 200
BUY YesBank-173 for 200+ with sl 168
BUY GHCL-42 for 70+ with sl 39
BUY IBReal-256 for 290+ with sl 250
NIFTY FUTURES LEVELS
RESISTANCE
4559
4615
4672
SUPPORT
4526
4499
4441
4385
4328
4272
Buy AUROBINDO PHARM;J&K BANKStrong & Weak futures
This is list of 10 strong futures:
This is list of 10 strong futures:
Purva, Bhushan Steel, Aurobindo Pharma, FSL, Jindal Saw, Patni, HCL Tech, Polaris Software, Ranbaxy Labs & Yes Bank Limited.
And this is list of 10 Weak futures:
Chambal Fert, India Cements, Bank Of India, Dabut India, Sesa Goa Ltd, RCom, ACC Ltd, Rel. Capital, Suzlon & Essar Oil.
Nifty is in downtrend
Nifty is in downtrend
NIFTY FUTURES (F & O):
Rally may continue up to 4557-4559 zone for time being.
Rally may continue up to 4557-4559 zone for time being.
Support at 4499 & 4526 levels. Below these levels, expect profit booking up to 4441-4443 zone and thereafter slide may continue up to 4385-4387 zone by non-stop.
Buy if touches 4328-4330 zone. Stop Loss at 4272-4274 zone.
On Positive Side, cross above 4613-4615 zone can take it up to 4670-4672 zone. If crosses and sustains this zone then uptrend may continue.
Short-Term Investors:
Bearish Trend. 3 closes below 4623.80 level, it can tumble up to 4092.20 level by non-stop.
BSE SENSEX:
Higher opening expected. Profit Booking should start.
Higher opening expected. Profit Booking should start.
Short-Term Investors:
Short-Term trend is Bearish and target at around 14235 level on down side.
Maintain a Stop Loss at 15973 level for your short positions too.
Short-Term trend is Bearish and target at around 14235 level on down side.
Maintain a Stop Loss at 15973 level for your short positions too.
POSITIONAL BUY:
Buy AUROBINDO PHARMA (NSE Cash)
Uptrend may continue.
Mild sell-off up to 691 level can be used to buy. If uptrend continues, then it may continue up to 705 level for time being.
If crosses & sustains at above 714 level then uptrend may continue.
Keep a Stop Loss at 682 level for your long positions too.
Buy J&K BANK (NSE Cash)
Uptrend may continue.
Mild sell-off up to 552 level can be used to buy. If uptrend continues, then it may continue up to 574 level for time being.
If crosses & sustains at above 587 level then uptrend may continue.
Keep a Stop Loss at 539 level for your long positions too.
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,505.96. Up by 155.91 points.
The Broader S&P 500 closed at 1,026.13. Up by 18.76 points.
The Nasdaq Composite Index closed at 2,020.90. Up by 31.68 points.
The partially convertible rupee INR=IN closed at 48.62/63 per dollar on Friday, stronger than its Thursday's close of 48.71/72.
Interesting findings on web:
Interesting findings on web:
The U.S. economy may be stuck in stop-start mode, but it's been nothing but go-go on Wall Street the last few days.
All three of the major U.S. averages — the Dow industrials, the S&P 500 and the always exciting Nasdaq composite — capped a four-day win streak today by closing at new 2009 highs. The Dow, which closed up 155.91 points at 9,505.96 (its first close above 9,500 since Nov. 4), is now up almost 17% from its early July doldrums, the highest close of the year and the highest the Dow has been since last fall. While the S&P 500, which jumped 18.76 points today to 1,026.13 and the Nasdaq, up 31.68 to 2,020.90, have notched similar gains.
The Dow is up more than 45 percent from its lows in early March.
The Russell 2000 index of small-capitalization stocks rose 12.83 points, or 2.3%, to 581.51.
John Bollinger, president of Bollinger Capital Management in Manhattan Beach, Calif., said he was particularly encouraged by the rise in the Russell. It has performed the best of the four major indexes lately, rising more than 46% since the beginning of March.
"That's really been the sweet spot of the market," said Mr. Bollinger, who has been betting on the small- and mid-sized companies that make up the Russell as growth plays for the early stages of an economic recovery.
"For that index to be making new highs along with everything else really confirms the trend we've been talking about," he said.
U.S. stocks on Friday rallied to finish at 2009 highs, with energy shares pacing the gains as the price of crude-oil futures also spiked to a their highest level this year. Unexpectedly positive data on the housing front supported the gains.
Friday's upswing has been attributed to investors hearing all the right things from Federal Reserve Chairman Ben Bernanke. Bernanke said the economy is on the verge of recovery. Also, national home sales increased in July, the fourth straight monthly increase.
The market has recently been behaving as if economic recovery is a foregone conclusion, said Steve Goldman, market strategist with Weeden & Co. in Greenwich, Conn.
"Now we're in that recovery phase when the gains become a bit more modest, but they're still forthcoming," he said, noting the broad-based character of Friday's rally. All sectors in the S&P 500 closed higher. "It's not a selective market. We're in a market where everything was cheap and everything has participated in this recovery phase."
Some traders are worried that the market could hit turbulence as the U.S. government gradually backs off policies it enacted as emergency measures to spur the economy along following the crisis that erupted late last year. For instance, the big gain in home sales reported Friday was driven in part by first-time buyers rushing to capitalize on a tax credit that expires this fall.
"The economy is off to a good start, but the question is what happens when a lot of these government programs go away," said trader Anthony Conroy, of the brokerage BNY ConvergEx in New York. "That's the big question for the market right now, but in the meantime you can't fight the numbers."
Although stocks are still down sharply from their record highs, Wall Street's recent rally keeps rolling along, despite lower corporate revenue, housing foreclosures and a blizzard of worries about higher long-term unemployment and lower consumer spending.
"This is a bull market," said Laszlo Birinyi Jr., president of Birinyi Associates, adding that he was investing in large banks, well-established technology companies like Apple and big industrial companies like 3M and United States Steel.
Shares of industrial companies, energy producers and manufacturers of chemicals, plastics and other basic materials led the markets as traders bet that a global rebound would revive the construction industry and get factories back to full production.
The heavy-equipment manufacturer Caterpillar gained nearly 4 percent, the most among the Dow's 30 blue-chip stocks.
American Express [AXP 32.85 0.33 (+1.01%) ] is the Dow's biggest gainer year to date, up more than 77 percent.
Alcoa [AA 12.56 0.13 (+1.05%) ] was the biggest decliner on the Dow this week, down more than 5 percent. Year-to-date, that title goes to Procter & Gamble [PG 53.58 0.56 (+1.06%) ], which is down more than 13 percent.
AIG [AIG 32.85 0.55 (+1.7%) ] shares rose 1.7 percent after the troubled insurerwon dismissal of a $1 billion workers' compensation lawsuit.
Morgan Stanley [MS 29.69 0.33 (+1.12%) ] rose 1.1 percent folllowing news the brokerage is planning a hiring spree for up to 400 traders and salespeople as the investment bank looks to pull out of its string of quarterly losses.
Starbucks [SBUX 19.71 0.49 (+2.55%) ] made a move that sums up the economy right now: It's lowering the prices on some of its basic drinks like small coffees and lattes but raising the price on some of its larger, more complex drinks. Its shares gained 2.6 percent.
Eric Claus, CEO of the supermarket chain A&P [GAJ 22.008 0.708 (+3.32%) ], said the stock market has gotten ahead of the consumer. Its shares climbed 3.3 percent.
Women's clothing chain Ann Taylor [ANN 13.44 0.62 (+4.84%) ] reported earnings of 6 cents a share that were better than Wall Street expectations. Its shares gained 4.8 percent.
And Aeropostale [ARO 39.55 3.67 (+10.23%) ] shot up more than 10 percent after the teen chain reported a rise in same-store sales.
Dayton-area companies saw their stock prices rise, including Dayton-based retailer and ethanol producer Rex Stores Corp. (NYSE: RSC), which was up 7.3 percent, or 79 cents, to $11.58.
• Standard Register (NYSE: SR), up 5.6 percent, or 21 cents, to $3.94;
• Fifth Third Bancorp (NASDAQ: FITB), up more than 4.7 percent, or 50 cents, to $10.91 per share;
• KeyCorp (NYSE: KEY), up 4.5 percent, or 29 cents, to $6.73;
• PNC Financial Services Group (NYSE: PNC), up 2.7 percent, or $1.15, to $42.86;
• AK Steel Holding Corp. (NYSE: AKS), up nearly 2 percent, or 40 cents, to $20.87;
• Teradata Corp. (NYSE: TDC), up more than 1 percent, or 28 cents, to $26.38;
• Robbins & Myers Inc. (NYSE: RBN), up 0.6 percent, or 13 cents, to $22.56; and• DPL Inc. (NYSE:DPL), up 0.6 percent, or 16 cents, to $24.99.
Most active New York exchange issue on 168 million shares, Citigroup (C) moving up $0.22, good move there.
Bank of America (BAC) up $0.32.
And General Electric (GE) up $0.40.
Fannie Mae (FNM), a little more bottom fishing, up a dime, good percentage move there.
Pfizer (PFE) up $0.41.
Wells Fargo (WFC) gained $0.46.
$0.13 advance in Freddie Mac (FRE).
JPMorgan Chase (JPM) gaining $1.24.
Ford Motor Co (F) up $0.06.
And then ExxonMobil (XOM) in a strong oil group, up $1.33. Crude oil touched 10-month highs today, closed at $73.89 a barrel, up $0.98 on the October contract in New York. And the oil sector very strong today.
We see Chevron (CVX), ConocoPhillips (COP), Hess (HES) and Marathon Oil (MRO) all participating in the rally in the energy sector.
Exxon Mobil closed higher.
The other Dow stocks that did very well today included Boeing (BA), Caterpillar (CAT), Merck (MRK), 3M Co (MMM) and United Technologies (UTX) all nicely into the plus column.
This one was even better, salesforce.com (CRM) jumping $7.49 on better than double second quarter earnings from last year, $0.17 versus $0.08. Revenues up 20 percent. The company boosted its fiscal year 2010 revenue guidance and the Piper Jaffray brokerage upgraded it from "neutral" to "over weight," nice combination of positives there.
Ryland Group (RYL) up $1.14. The home builders were firm on the news of that better than 7 percent rise in July existing home sales.
Brunswick (BC) up $1.26. An analyst at Citigroup notes that boat sales are modestly improving.
Aeropostale (ARO) nice move, up $3.67. The teen apparel retailer had sharply higher second quarter earnings of $0.57, up from $0.31 last year. Same store sales rose 12 percent. The company sees third quarter earnings rising to the $0.76 to $0.78 level and the Stiefel brokerage upgraded it from "hold" to "buy."
Another apparel seller doing well, Limited Brands (LTD) up $1 after Citigroup upgraded it from "hold" to "buy."
And JM Smucker (SJM) a gain of $2.22. First quarter earnings, $0.83, up from $0.77 last year and listen to this, on a 58 percent sales increase, but that was largely due to the acquisition of Folgers.
NASDAQ's most active, Apple (AAPL) up $2.89. After the close, the company said it blocked the Google voice program from running on the iPhone because it alters important functions, but it will continue to study that situation.
Microsoft (MSFT) $0.74 gain.
Google (GOOG) up $4.83.
And then Cisco Systems (CSCO) $0.30 gain there.
$0.18 rise in Intel (INTC).
Qualcomm (QCOM) gained $0.20.
But First Solar (FSLR) down $8.88. The Jefferies brokerage downgraded several solar stocks from "buy" to "hold" in the belief demand might not be enough to support current product levels.
Research in Motion (RIMM) up $1.91.
And Oracle (ORCL) $0.17 gain.
Baidu (BIDU) did well, up $5.75.
Intuit (INTU) down $2.23. Fourth quarter earnings, weren't any earnings. There was a loss of $0.10, bigger than last year's loss of $0.08 per share and revenues were flat.
Clothing retailer Gap said late Thursday its second-quarter profits dropped 0.4%, narrowly beating expectations even as it posted lower sales across all four of its divisions. Its shares gained 3.3%.
J.M. Smucker's fiscal first-quarter earnings more than doubled, driven by its Folgers acquisition and volume increases at its U.S. retail businesses. The company said fiscal-year earnings are more likely to be at the higher end of its previous estimate and affirmed its fiscal-year revenue forecast. Shares rose 4.3%.
As this blog's jefe, Tom Petruno, observed, Wall Street's buoyancy this week in the face of sharply higher oil prices and a scary sell-off in China has baffled many pundits.
CNBC has been flashing charts of the VIX — a measure of stock price volatility — with a frequency usually reserved for Jim Cramer's market musings.
The catalyst for today's rally appeared to be encouraging words from Fed Chairman Ben S. Bernanke, who said "the prospects for a return to growth in the near term appear good." Bernanke, speaking at the Fed's annual conference amid Wyoming's Grand Teton mountains, did warn that the ongoing credit squeeze is posing a challenge to consumers and businesses alike.
And that worries many analysts, who like to note that any rebound not accompanied by a strong revival in consumer spending is unlikely to be of the Charles Barkley variety.
"Consumer spending normally is the driver of recoveries at the beginning," Bob Baur, chief global economist at Principal Global Investors, told the Associated Press. "That's not happening this time."
"At some point, the market is going to ask to see more than just mixed data," he said. "It's going to want to see some real jobs produced and an end to job losses and some validation that the consumer isn't going to stay in a slump."
Maybe housing will ride to the rescue, although that crucial sector has typified the good-news, bad-news character of the economy these days. Today, the news was good: The National Assn. of Realtors said sales of existing homes rose a more-than-expected 7.2% last month to a seasonally adjusted annual rate of 5.2 million, up from a pace of 4.9 million in June.
It was the fourth straight monthly increase and the highest level of sales since August 2007. The rise in sales, however, came amid a sharp decline in home prices.
While forecasters had been expecting home sales to grow for the month, the size of the increase surprised investors and economists. It was the largest monthly gain since the group began tracking existing home sales in 1999.
"I'm a little bit flabbergasted," said Patrick Newport, an economist at IHS Global Insight. "These are really good numbers."
Moreover, home sales last month were 5 percent higher than in July 2008. Homes were selling at a seasonally adjusted annual rate of 5.2 million in July, up from a rate of 5 million a year earlier.
It was the first year-over-year increase in home sales since November 2005.
Potential buyers who abandoned the housing market last year as credit was choked off and prices tumbled are beginning to return, enticed by lower prices in some markets and tax incentives for first-time home buyers.
But some housing analysts warned that sales could ebb as more distressed homes flood onto the market, and when the government's $8,000 tax credit for first-time home buyers expires at the end of the year. If unemployment keeps rising, some potential buyers will be unable to enter the market.
"The data today was really good, and it's wonderful, but how sustainable is it?" said David M. Klaskin, chief investment officer at Oak Ridge Investments. "The real big risk is that you don't get a sustainable recovery, that the recovery doesn't get legs under it."
Over all, economists said, Friday's numbers offered another signal that the housing market was climbing out of the basement, even as foreclosures and delinquencies crept higher amid rising job losses.
Sales of existing homes — which make up the bulk of home sales — have risen over the last four months.
The median sale price of homes nationwide fell to $178,400, and more homes poured onto the market as foreclosures increased and sellers detected a hint of enthusiasm among buyers.
"The housing market has decisively turned for the better," Lawrence Yun, chief economist at the Realtors' association, said in a statement.
The market held relatively steady and trading volume slowed following the approximately 15-minute spike in the immediate aftermath of the housing data. But that was enough to leave the market with a solid gain for the session.
"The housing number is certainly the absolute cause of the rally today," said Richard Sparks, senior options trader at Schaeffer's Investment Research in Cincinnati, Ohio. "It didn't just beat the consensus; it did so by a stunningly wide margin. When you have things like that happen, you get investors and traders who haven't been fully committed to the market jumping aboard because they suddenly feel like they don't want to miss out."
Indeed the size of July's increase in sales in percentage terms was more than triple the expectations of analysts, according to Thomson Reuters data.
Oil,Gold & Currencies:
Prices of oil, copper and gold all rose.
Oil, meanwhile continued its recent ascent, rising $1.35 to a 2009 high of its own of $73.89 a barrel in New York trading. That helps energy stocks and the cadre of investors playing crude futures, but makes most everyone else mad — not to mention raising inflation fears and leaving a little less in the wallet to blow on those new "premium" Gap jeans.
Traders in recent days have said that speculative buyers have been returning to oil at the same time they buy stocks, producing unusual moves in tandem in those markets.
A barrel of oil remains roughly half of where it stood at its height last summer, when crude-oil futures on July 11, 2008, hit an intraday high of $146.65. The Dow industrials shed 129 points that day.
"A year or so ago, higher (oil) prices were bad for the stock market, now the inverse is true. It's seen as a sign of economic recovery," said Kevin Kruszenski, director of equity trading at KeyBanc Capital Markets.
The yen and dollar fell against the euro on growing optimism the global economy is recovering from the deepest recession since the 1930s, easing demand for the currencies as a refuge.
The euro traded near the strongest level in more than two weeks against the greenback before a report forecast to show European industrial orders declined at a slower pace in June. The Australian dollar advanced for a fifth session, the longest winning streak since June, as Asian stocks extended a global equity rally, boosting demand for higher-yielding assets.
"Improving economic fundamentals and gains in stocks make it easier for investors to take on more risk," said Yuji Kameoka, a strategist in Tokyo at Daiwa Institute of Research Ltd., a unit of Japan's second-largest brokerage. "As a result, typically lower-yielding currencies like the yen and dollar will retreat against higher-yielding assets."
The yen fell to 135.79 per euro as of 10:59 a.m. in Tokyo from 135.21 in New York on Aug. 21. It earlier touched 135.99 per euro, the weakest since Aug. 14. The greenback slumped to $1.4344 per euro from $1.4326 in New York. The dollar rose to 94.68 yen from 94.38 yen.
Australia's currency rose to 84.04 U.S. cents from 83.48 cents in New York last week. The currency advanced to 79.56 yen from 78.79 yen.
The MSCI Asia Pacific Index of regional shares rose 2.3 percent today, and the Nikkei 225 Stock Average rallied 3.1 percent. The Standard & Poor's 500 Index gained 2.2 percent in New York last week, touching a 10-month high, as sales of existing U.S. homes climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007.
Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations' higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
Industrial Orders
The euro climbed toward the strongest level in a week against the Japanese currency as a Bloomberg News survey of economists showed orders at industrial companies in the euro region fell 28.3 percent from a year earlier in June following a 30.1 percent drop in the previous month. The European Union's statistics office will announce the data in Luxembourg today.
The Ifo institute in Munich will release its business climate survey on Aug. 26. German business confidence will rise for a fifth month in August, according to the median of 41 forecasts in a Bloomberg survey.
"An expected rise in the Ifo index will lend some support for the euro, especially against the dollar," said Masashi Nakamura, a Tokyo-based economist at Mizuho Research Institute Ltd., a unit of Japan's second-largest banking group. The euro may advance to as high as $1.441 this week, he said.
'Beginning to Emerge'
The dollar fell against 12 out of the 16 most-active currencies tracked by Bloomberg before reports this week expected to show durable goods orders rose and housing prices shrank at a slower pace.
Orders for durable goods, those meant to last several years, probably jumped 3 percent in July, reversing the previous month's 2.5 percent decline, economists projected an Aug. 26 report from the Commerce Department will show.
The S&P/Case-Shiller index of property values in 20 U.S. metropolitan areas probably fell 16.5 percent in June from a year earlier, the smallest decline in almost a year, a separate survey showed. The report is due tomorrow.
The global economy is "beginning to emerge" from a recession after aggressive action by central banks and governments, Federal Reserve Chairman Ben S. Bernanke said Aug. 21 at a symposium in Jackson Hole, Wyoming.
Aussie Dollar
The Australian dollar pared gains after the nation's Bureau of Statistics said today new vehicle registration fell 6.9 percent in July, snapping a three-month gain.
This, combined with "lingering uncertainty about Australia's relationship with China may weigh on the Australian currency," said Toshiya Yamauchi, manager of the foreign- exchange margin trading department in Tokyo at Ueda Harlow Ltd.
The Baltic Dry Index, a measure of shipping costs for commodities, dropped this month to the lowest since May as Chinese demand for shipments of coal and iron ore slowed. That gauge and Australia's dollar have moved in tandem 86 percent of the time on a weekly basis over the past 10 years, according to data compiled by Bloomberg.
Futures traders decreased their bets that the Australian dollar will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show.
The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 44,120 on Aug. 18, compared with net longs of 48,846 a week earlier.
Bonds:
Interest rates were higher. The price of the Treasury's benchmark 10-year note fell 1 4/32, to 100 16/32, and the yield rose to 3.56 percent, from 3.43 percent late Thursday.
What to expect:
More than $100 billion in Treasury auctions, a report on bailout executive pay, durable-goods orders, new-home sales, the second reading on second-quarter GDP, personal income and spending, consumer confidence and spending, and earnings from Dell and Tiffany.
Asia:
Stock markets in Asia were higher across the board in Monday morning trading, with Japan and China leading the way.
Japan's Nikkei average [JP;N225 10557.33 319.1299 (+3.12%) ] surged, buoyed by hopes for a global economic recovery that sent U.S. shares higher, with Canon and other exporters leading the benchmark's rise.
Convenience store operator Lawson and drugstore chain Matsumotokiyoshi Holdings climbed after announcing they would jointly open stores combining their two retail formats.
China's Shanghai Composite Index [CN;SHI 2991.343 30.572 (+1.03%) ] was with strong earnings by index heavyweight Sinopec and a rise on Wall Street helping offset announcements of major new share offerings.
Sinopec, the world's second-largest refiner after Exxon Mobil, jumped 3.44 percent to open at 13.55 yuan after it posted record quarterly profits that widely exceeded expectations.
China's stock regulator announced late on Friday that it would review an application this week by Metallurgical of China for a Shanghai IPO aiming to raise 16.85 billion yuan ($2.5 billion), while approving a Shanghai IPO by train maker China CNR to raise nearly $1 billion.
The index had managed a rebound in the final two days of last week after falling 20 percent over a two-week period, as a 90 percent rally since the start of the year stalled amid concerns about stretched valuations, tightening market liquidity and fresh supplies of equity in the market.
The pullback in large part also reflected Chinese corporations pulling money out of the market as they shifted bank borrowings from short-term investments into longer-term projects.
Elsewhere, Australia's S&P/ASX 200 [AU;XJO 4404.2 113.60 (+2.65%) ] was higher. Australia's Fairfax Media advanced as the firm said a decline in advertising revenue appeared to have bottomed in the first seven weeks of the new financial year. But Worley Parsons tumbled after forecasting a drop in full year earnings.
South Korea's Kospi [KR;KSPI 1604.69 23.71 (+1.5%) ], the Singapore Straits Times index [GB;STI 2596.52 51.66 (+2.03%) ] and Hong Kong's Hang Seng [HK;HSI 20638.04 439.0195 (+2.17%) ] were also in the green.
Nikkei 225 10,557.33 +319.13 ( +3.12%) (08.27 AM IST).
Japan's key stock index rose over 3 percent Monday on growing hope for global economic recovery and political stability at home.
Japan's Nikkei stock average rose 1.5 percent on Monday after U.S. stocks powered to new highs for the year on growing reassurance about the prospects for a global economic recovery.
Murata Manufacturing rebounded Monday, rising as much as 170 yen to hit 4,580 yen on the back of robust buying by overseas institutional investors.
Chugai Pharmaceutical rebounded Monday after The Nikkei reported that the drugmaker will sell a version of the Tamiflu flu medication tailored to the Japanese market and produced domestically.
HSI 20632.08 +433.06 +2.14% (08.36 AM IST).
Hong Kong stocks rallied early Monday in response to strong pre-weekend gains on Wall Street, with shares of China Petroleum & Chemical Corp., or Sinopec, in the lead after the refiner said its first-half profit more than quadrupled. The Hang Seng Index jumped 2% to 20,592.77 and the Hang Seng China Enterprises Index rose 1.9% to 11,684.31. China's Shanghai Composite rose 0.4% to 2,972.83. Sinopec /quotes/comstock/13*!snp/quotes/nls/snp (SNP 90.66, +1.13, +1.26%) /quotes/comstock/22h!e:386 (HK:386 7.11, +0.19, +2.75%) rose 3.5% in Hong Kong and 2.1% in Shanghai after it reported earnings Sunday.
Hang Seng Index opens 450 points higher on Mon
Hong Kong stocks rose on Monday morning, with the benchmark Hang Seng Index opening 450 points higher at 20,649.
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 315 points higher at 11,780.
Sinopec<600028><0386><SNP> increased 4.77% from the previous closing to HK$7.25. PetroChina<601857><0857><PTR> rose 3.49% and opened at HK$8.9.
SSE Composite 2980.17 + 0.66 (08.38 AM IST).
Chinese stocks open 0.72% higher on Mon
Chinese stocks opened higher on Monday morning, tracking gains from the previous closing over the weekend.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,982 points, up 0.72% or 21 points from the previous closing.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.59% or 70 points higher at 11,962 points.
Auto shares surge, shrugging off end of clunkers program
Asian automobile shares jumped Monday, ignoring concerns that September sales in the U.S. could fall after the government's "cash for clunkers" incentive program ends later in the day, as analysts expect a cyclical recovery in American sales in the months ahead.
HTC confirms team-up with China Mobile on TD-SCDMA phones
Toyota recalling almost 690,000 cars in China: regulator
Toyota Motor Co. /quotes/comstock/13*!tm/quotes/nls/tm (TM 86.35, -1.08, -1.24%) is recalling 688,314 sedans in China due to a problem with the vehicles' electronic window control systems, China's quality regulator said Sunday.
China's Sinopec reports big increase in first-half net profit
China Petroleum & Chemical Corp., Asia's biggest refiner, said Sunday that its first-half net profit increased sharply, exceeding analyst expectations.
China, Australia resume free trade talks.
Gome reports 49.6% decline in H1 net profit.
CSRC gives green light to China CNR's IPO application.
China's GDP to grow 8.5% in Q3: SIC.
Sinopec sees net profit skyrocket 332.6% in H1.
CCB posts 11.7% growth in Q2 net profit.
Yingli Green Energy suffers nearly RMB 400-mln loss in Q2.
Canon aims to boost digital camera sales in China.
Taobao H1 transaction volume hits RMB 80.9 bln.
Kaisa Property revives IPO in HK.
China's SOEs see profit drop 22.8% in Jan-Jul.
China Stocks May Extend Losing Month as Lending Curbs Planned
China's plan to slow bank lending is helping curb stock-market speculation as the benchmark Shanghai Composite Index heads for its first monthly drop since December.
"The good thing is that the market is worried about it," Hugh Simon, manager of the Dreyfus Greater China Fund, the best- performing U.S. mutual fund this year, told Bloomberg Television in Hong Kong. "If there was this overexuberance that enabled us to carry on and keep going, that would be more dangerous."
The Shanghai Composite index is down 13 percent this month, the biggest decline among 89 benchmark indexes tracked by Bloomberg. The China Banking Regulatory Commission sent draft rule changes to banks on Aug. 19 requiring them to reduce record lending that helped fuel the index's 63 percent rise this year, three people familiar with the matter said. Banks have until Aug. 25 to give feedback, said the people, declining to be named as the matter is private.
China's stocks are too expensive and the government's proposal for banks may help bring prices in line with U.S. shares, said Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago. Even with this month's decline, the Shanghai index trades at 31.7 times reported earnings, compared with 18.9 for the S&P 500.
"Clearly, it is a step to damp down the speculative lending and is warranted," Ablin said in an interview. "Anyone who thinks that the Chinese stock market is a barometer for the economy is misguided. It has to drop regardless of what happens in the economy."
Record Loans
A record $1.1 trillion of new loans in the first half that helped support the nation's $585 billion economic stimulus package spurred stock gains this year. Regulators are proposing that banks deduct all existing holdings of subordinated and hybrid debt sold by other lenders from supplementary capital, according to the people, who have seen the document.
The benchmark Shanghai index on Aug. 19 briefly was down 20 percent below this year's high, the threshold for a bear market, before rebounding 6.3 percent the last two days of the week. The Bank of New York Mellon China ADR Index, tracking American depositary receipts, slipped less than 0.1 percent to 368.36 in New York on Aug. 21.
Outflows from China equity funds made the third week of August the worst since the first quarter of 2008, amid concern banks may have expanded credit too rapidly, EPFR Global said in an e-mailed statement dated Aug. 20.
Investors opened 484,185 accounts to trade stocks two weeks ago, the slowest pace since the five days ended July 10, according to data from the nation's clearing house. Account openings peaked this year at 700,617 in the last week of July, days before the index reached this year's high, the data show.
Shanghai Index Forecast
Lan Xue, Citigroup Inc.'s Hong Kong-based head of China research, said she doesn't expect the government to tighten lending in the near term. Xue, ranked second for China strategy in Institutional Investor's annual survey, expects the Shanghai index to rally to 3,800 by the end of the year, a rise of 28 percent from the Aug. 21 close of 2,960.77.
Xue favors shares of banks as valuations are "very attractive." Insurers will benefit from an increase in medium- term interest rates, while higher income and government efforts to improve social welfare will boost consumer stocks, she said.
Policy makers will maintain bank lending and earnings will beat estimates, helping equities to rebound, David Cui, a China strategist at Bank of America's Merrill Lynch unit in Shanghai, said in a phone interview Aug. 19.
"I don't think this is a turning point," Cui said. "My sense is that earnings will surprise on the upside and we'll see a round of earnings upgrades. The government's monetary policy also hasn't changed."
China Economy
Economic growth in the third-largest economy may accelerate to 8.5 percent this quarter on stimulus spending and a "moderately loose" monetary policy, according to a forecast by the State Information Center, a government research agency, in China Securities Journal. Gross domestic product expanded 7.9 percent in the second quarter.
Simon, who manages the $972 million Dreyfus Greater China Fund at Hamon Investment Group in Hong Kong, said the prospect of a tighter monetary policy may not hurt China stocks because earnings will improve and industries such as shipping that have lagged behind the rally this year will advance as exports recover. He expects a bull market for the next six to nine months.
China stocks probably face a further "correction" in the next 30 days because of regulatory risks, UBS AG strategist John Tang said in a report Aug. 20, advising investors to be "less aggressive for now, more aggressive" later. Government policy may make a greater impact in the third quarter of the year on Shanghai-listed shares in "over-heated" industries such as property and metals, than on peers traded in Hong Kong, he said.
New loans were 355.9 billion ($52.1 billion) in July, less than a quarter of the amount a month earlier, according to the central bank. China Construction Bank Corp., the nation's second-biggest lender by market value, said Aug. 21 it plans to make fewer loans in the second half amid concern about the risk of rising defaults.
'Growth Machine'
"The Chinese government needs to keep the growth machine going and will periodically tell banks to lend and then will try to dampen it down a bit," Burton Malkiel, the Princeton University economist who predicted the plunge in China stocks last year, saying in a January 2008 interview that the "bubble" would burst once the government allowed funds to flow more freely. The Shanghai index tumbled 65 percent in 2008.
"I don't see the government saying that this is the end of it," he said in a telephone interview.
Chinese stocks aren't at "bubble levels" based on current valuations, said Malkiel, author of the 1973 book "A Random Walk Down Wall Street."
U.S. May See 150-200 More Bank Failures: Bove
A prominent banking analyst said Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.
Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.
"The difficulty at the moment is finding enough healthy banks to buy the failing banks," Bove wrote.
The FDIC is expected on August 26 to vote on relaxed guidelines for private equity firms to invest in failed banks, after critics said previously proposed rules were too harsh and would actually dissuade firms from making investments.
Bove said "perhaps another 150 to 200 banks will fail," on top of 81 so far in 2009, adding stress to the FDIC's deposit insurance fund.
Three large failures this year — BankUnited Financial in May, and Colonial BancGroup, Guaranty Financial Group in August — collectively cost the fund roughly $10.7 billion.
The fund had $13 billion at the end of March.
Regulators closed Guaranty's banking unit on Friday and sold assets of the Texas-based lender to Banco Bilbao Vizcaya Argentaria. The FDIC agreed to share in losses with the Spanish bank.
Bove said the FDIC will likely levy special assessments against banks in the fourth quarter of this year and second quarter of 2010.
He said these assessments could total $11 billion in 2010, on top of the same amount of regular assessments. "FDIC premiums could be 25 percent of the industry's pretax income," he wrote.
After a Year of Crisis, Bernanke's Star is Rising
Last year, as the gravest financial crisis since the Great Depression shook the banking system, Ben Bernanke seemed nearly as beleaguered as the institutions themselves.
The Federal Reserve chief had initially underestimated the crisis — and then seemed to inject new risk by unleashing breathtaking sums of money to fight it. Now, a strengthening economy is raising Bernanke's standing just as President Barack Obama must decide whether to reappoint him.
His supporters say Bernanke, 55, a scholar of the Great Depression, has the knowledge and ability to guide a sustainable recovery without igniting inflation. And they argue that without his bold interventions, the global financial crisis could have been much worse.
"He has risen to the occasion admirably after what you might argue was a slow start," says Alan Blinder, a Princeton professor who was Fed vice chairman in the mid-1990s. "His performance merits reappointment."
Bernanke, having just wrapped up the Fed's annual conference in Jackson Hole, Wyo., remains under pressure to help speed a recovery. Joblessness, now at 9.4 percent, is expected to hit double digits this year. Yet his riskiest task is to decide when and how to unwind the Fed's emergency rescue programs without endangering the economy.
His critics see failures in Bernanke's performance. They say he overplayed his hand by swelling the Fed's balance sheet to nearly $2 trillion, a once-unthinkable threshold.
They argue that the success of the emergency rescue programs has been inconsistent. And they blame Bernanke for politicizing the Fed: They point, for example, to his role in deciding which banks would benefit from taxpayer-funded bailouts and which would not.
"His handling of the crisis has put the Fed in an awkward political position," says William Poole, former president of the Federal Reserve Bank of St. Louis, who doesn't think Bernanke should be reappointed.
Other decisions, too, should have been left to Congress, says Poole, who retired in 2008 after 10 years at the regional Fed bank.
Regardless of the criticism and Obama's verdict, Bernanke will go down as a monumental figure, for better or worse, in the history of the Federal Reserve. Which is ironic. When Bernanke became chairman in February 2006, after Alan Greenspan's 18-year tenure, he tried to tilt the spotlight away from himself, preferring to elevate the agency itself.
The financial crisis demonstrated Bernanke's ability to build consensus at the Fed and to engineer creative solutions not normally in the agency's playbook, said Allen Sinai, chief global economist at Decision Economics Inc.
"Those are huge pluses," Sinai said.
While many leaders on Capitol Hill and Wall Street credit Bernanke for the unconventional thinking that defined his response to the financial crisis last fall, few said so back then. For months, the Fed chief came under intense criticism as he worked with the Treasury Department to bail out banks and pump trillions into the financial system to try to ease credit clogs.
Even before the crisis intensified last fall, the Fed took the historic step of letting investment firms draw low-cost emergency loans from the central bank -- a privilege long allowed only for commercial banks. After a run on Bear Stearns pushed it to the edge of bankruptcy, the Fed and the Treasury nudged what was the nation's fifth-largest investment bank into a takeover by JPMorgan Chase [JPM 43.66 1.24 (+2.92%) ].
And to revive the economy, the Fed has deployed radical new tools. This year, it rolled out a $1.75 trillion program to buy government debt and mortgage-backed securities and debt from Fannie Mae [FNM 1.20 0.10 (+9.09%) ] and Freddie Mac [FRE 1.73 0.13 (+8.13%) ]. The goal is to lower rates on mortgages and other consumer debt.
Mortgage rates did ease. But many feared the Fed's buying of government debt made it appear to be printing money to narrow a bulging federal budget gap.
"What I learned from this is that when you're in a situation like this — a perfect storm — sometimes you've got to do something a little bit outside the box, a little more aggressive," Bernanke said last month at a town-hall style meeting in Kansas City, Mo.
Even his supporters concede Bernanke was among many regulators who failed to detect early hints of the housing and mortgage collapse. Yet once the credit crisis erupted in the summer of 2007, "Mr. Bernanke engineered a U-turn in Fed policy that prevented the crisis from turning into a near depression," Nouriel Roubini, a New York University economics professor and former Bernanke critic, wrote recently in support of his reappointment.
Bernanke's advocates point to two steps that they say were especially critical in managing the crisis.
— In January 2008, Bernanke started pushing through super-sized rate reductions to prop up the ailing economy.
— Early last fall, after the Fed and Treasury stood by as Lehman Brothers collapsed, Bernanke rolled out programs to spur lending and stabilize financial markets.
Some who think Bernanke went too far in supporting bailouts and low-cost loans for big banks argue he shouldn't be reappointed.
The use of a $700 billion taxpayer-financed fund to bail out big institutions, such as insurer American International Group Inc., angered many Americans. Critics fear that financial firms deemed too big to fail now have no incentive to curb risk taking.
"Just the fact that (the Fed) can issue a lot of loans and special privileges to banks and corporations — that's political," huffs Rep. Ron Paul, R-Texas.
Bernanke also failed to detect early on the scope of potential damage from high-risk mortgages. In June 2007, he declared that troubles in the subprime mortgage market were "unlikely to seriously spill over to the broader economy or the financial system."
Still, sentiments on Capitol Hill suggest his chances of reappointment have risen. "We all look forward to continuing to partner with you," Senate Banking Committee Chairman Christopher Dodd, D-Conn., who has been critical of the Fed, told Bernanke last month.
Lawrence Summers, a senior Obama adviser, is often mentioned as an alternative choice. Other contenders include Janet Yellen, president of the Federal Reserve Bank of San Francisco; Christina Romer, a top Obama economic adviser; Roger Ferguson, the former No. 2 Fed official; and Princeton's Blinder.
For now, Bernanke benefits from the role of incumbent. He has taken the unusual step for a Fed chief of fielding questions in a PBS town-hall style meeting and on CBS' "60 Minutes."
To prevent another crisis, Bernanke has said Congress should create a way to safely wind down a big financial institution. And he think "too big to fail" institutions should be subject to stricter regulation.
Bernanke contends that when the crisis erupted, he couldn't play cautiously, regardless of criticism. Instead, he swung for the fences.
The enormous bailouts were necessary to avert financial and economic ruin, he said, because the rescued companies were linked to the entire global economy.
As he put it last month, "I was not going to be the Federal Reserve chairman who presided over the second Great Depression."
INVESTMENT VIEW
Assam Company: The Frenzy For Tea Stocks Will Destroy Investors
Assam Company: The Frenzy For Tea Stocks Will Destroy Investors
After the love for Sugar stocks has cooled down a bit, the bigger players have been whipping up momentum in another sector which has been hit by drought-Tea. So anything remotely connected to Tea, be it Jayshree, Goodricke Group, Mcleod Russell, Norben Tea and now Assam Company have begun to show sizeable moves. But investors in Assam company should look up this announcement to the BSE, which was made last week and they will get a bit discerning about the stocks they are chasing.
Assam Company Ltd has informed BSE that the Board of Directors meeting was held on August 18, 2009, but had to be adjourned as all the items of the Board Meeting Agenda i.e. (i) The Audited Financial Results of the Company for the year ended December 31, 2008 & (ii) The recommendation of dividend, if any could not be completed.
The Company will inform the next date of the adjourned Board Meeting which will also consider the Audited Financial Results of the Company for the year ended December 31, 2008, inter alia matters related thereto and other issues, as soon as the same is decided.
(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.)
SPOT LEVELS TODAY
 | 4528.80 | ( 1.69 %) | 75.35 |  |
| 1 | 2 | 3 | ||
| Resistance | 4578.03 | 4627.27 | 4715.83 | |
| Support | 4440.23 | 4351.67 | 4302.43 | |
 | 15240.83 | ( 1.52 %) | 228.51 | | |
| 1 | 2 | 3 | |||
| Resistance | 15398.97 | 15557.12 | 15839.06 | ||
| Support | 14958.88 | 14676.94 | 14518.79 | ||
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 | 21-Aug-2009 | 2414.84 | 1882.04 | +532.8 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 21-Aug-2009 | 1069.99 | 974.27 | +95.72 |
Index Outlook: Swaying with Shanghai
There was pandemonium in the first half of last week as tremors emanating from Shanghai made stock prices tumble. It was only after the Chinese stocks reversed higher that other equity markets could recoup their losses. For those who enjoy seeing alphabets in market movement, a 'U' shaped recovery was staged by the Sensex last week. This helped the index close with a mild 171-point loss.
Lack of news-flow is likely to keep our market tuned in to global developments next week too. Expiry of derivative contracts of the August series next week can cause some volatility since open interest is nudging Rs 89,000 crore. Market participants appear to be uncertain about the direction in which the market would move next. Low volumes in the cash segment and a higher churn in derivative segment corroborate that view.
Despite the drama witnessed on our bourses last week, the short-term and medium-term trends remain unaltered in the Sensex. Although the support at 14,700 was tested, it was not violated. Friday's movement has made the short-term mildly positive for the index. Oscillators in the daily chart that are attempting to rise from the bearish zone also reflect a positive bias.
The oscillators in the weekly chart are, however, advising caution. The 10-week rate of change oscillator has moved down to the zero line from the positive zone and the 14-week relative strength index is also declining from the positive zone. This implies that the Sensex is critically poised and can launch into a medium-term decline if it closes below 14,282. We, however, maintain a medium-term range between 13,000 and 16,000 for the index.
Needless to add that guessing the short-term direction is next to impossible in such a market. The Sensex can follow either of these trajectories over the forthcoming sessions:
a) The index can move up to 15,500 or 16,002 in the short-term and reverse lower. Reversal below the first target would imply weakness and a move downward to 14,700 or 14,244. Reversal from the 16,000 zone will result in the sideways move between 14,700 and 16,000 continuing for a few more sessions.
b) Break-out above 16,000 will take the index to 16,200 or 16,400.
c) Decline below 14,200 will imply an imminent fall to the zone between 13,200-13,400.
Our preferred view is the first one where the Sensex remains in a range keeping everyone on tenterhooks. Consolidation between 14,700 and 16,000 would be positive from a purely trend-following perspective and could lead to another spurt higher.
Nifty (4,528.8) Nifty declined to an intra-week low of 4,353 before reversing higher. Despite the reversal towards the end of the week, we remain circumspect regarding the medium-term outlook.
The 10-week ROC remained in the negative zone for the second consecutive week and the daily momentum indicators are also in the negative zone.
Nifty can attempt to move higher to 4,600 or 4,731 next week. Reversal below the first target will imply weakness and an impending decline to 4,370 or 4,230 in the near-term. Reversal from 4,731 will, however, make the short-term view neutral and signal a sideways move between 4,400 and 4,700 for a few more weeks. Such a move would be construed a positive consolidation phase.
Sharp decline below 4,246 is required to signal that the Nifty is headed towards 3,900.
Global CuesEquity markets world-wide began the week with a sharp downward jolt. But the bulls did not allow the cut to get any deeper and the strong pullback on Friday made many of the benchmarks close at new 2009 highs. CBOE VIX spiked to 28 on Monday only to slide down to 25 towards the week-end.
Many of the developed market indices recorded a break-out on Friday.
FTSE 100 has recorded a strong close above key resistance at 4,747 denoting a possible move to 5,100 next. The Dow broke out above its medium-term trading band at 9,400 on Friday.
The target of the third led from March low at 9,575 could be tested now. But if it manages to build on the gains and hold above 9,400, next target for the index would be around 10,300. S&P 500 too is testing the resistance at 1,013 indicated last week. If this level holds, next target is around 1,100.
Asian benchmarks such as Hang Seng, Jakarta Composite, KLSE Composite, Nikkei, Taiwan Weighted Index and so on, that did not participate in Friday's surge closed the week in the red forming a mild reversal pattern in the weekly chart.
We, however, need to see the decline extend next week to ensure a medium-term reversal.
The Shanghai Composite Index, the perpetrator of last week's turbulence, has formed a hammer in the weekly chart implying a pull-back rally in the short-term. This pull-back is taking place from the key support at 2,800. This level needs to be breached to signal a more serious correction is in the offing. Resistance for the week would be at 3,000 and then 3,200
Reliance (Rs 1,928.6)
RIL moved contrary to our expectation last week, sliding gently to close with a loss of Rs 105.The stock is halting at the lower boundary of the range between Rs 1,900 and Rs 2,100 indicated in this column that is at the key medium-term support. A close below Rs 1,870 will imply an impending move to Rs 1,718 or Rs 1,530 over the medium-term. There is, however, a strong likelihood of the correction from May 22 peak halting above Rs 1,530.
RIL will face resistance at Rs 1,965 or Rs 1,990 next week. Fresh shorts can be initiated on a failure to clear the first resistance. Downward targets are Rs 1,835 and Rs 1,718. The 200-day moving average poised at the first target can be an area from where a sudden rebound is possible.
State Bank of India (Rs 1,776.7)
SBI went on a roller-coaster ride last week, first plunging to an intra-week low of Rs 1,670 before recouping the losses to close the week on a flat note. The long-legged doji in the weekly chart is part of the consolidation going on since the last week of July. We stay with the view that the key intermediate resistance between Rs 1,900 and Rs 2,000 needs to be cleared before the stock makes a dash towards its previous high. Else it can slide towards Rs 1,500 again.
The up-trend from March lows will not be threatened as long as SBI trades above Rs 1,500. Consolidation between Rs 1,500 and Rs 1,900 will be considered a good platform from where SBI can launch another upward moving wave.
The short-term view for SBI is neutral and a movement between Rs 1,650 and Rs 1,850 is likely in this time-frame.
Tata Steel (Rs 444.9)
Tata Steel trudged sideways in the band between Rs 430 and Rs 460 last week, making the near-term view neutral. Immediate resistance for the stock is between Rs 490 and Rs 495, which is also a key medium-term resistance. Strong weekly close above Rs 500 will signal a possible rally to Rs 557 or Rs 650.
Short-term investors can continue to buy in declines as long as the stock trades above Rs 430. Fresh purchases are not recommended on a decline below this level since subsequent targets are Rs 412 and Rs 390. Medium-term investors can stay sanguine as long as the stock holds above the 200-day moving average at Rs 370.
Infosys (Rs 2,028.5)
Infosys made a 'V' shaped recovery from the intra-week low of Rs 1,936 to close with marginal loss. Resistances for the week are at Rs 2,050 and Rs 2,113. Failure to move above the first resistance would signal that the downtrend can continue in the short-term to pull Infosys lower to Rs 1,935 or Rs 1,880.
As we have been reiterating, medium-term view for Infosys will remain positive as long as the stock holds above Rs 1,950. The turbulence over the last three weeks, however, denotes that the stock could move in the band between Rs 1,950 and Rs 2,100 for a few more weeks before edging towards its previous high.
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Arvind Parekh
+ 91 98432 32381
