INTRADAY calls for 25th Sep 2009
BUY Educomp-4457 @ 4400 for 4500+ with sl 4380
BUY NTPC-212 @ 208 for 215+ with sl 205
BUY Nifty-4950 with sl 4930 [todays sl 4925]
BUY Rcom-304 [todays sl 299]
BUY HDFC-2673 [todays sl 2690]
NIFTY FUTURES (F & O):
Below 4978 level, expect profit booking up to 4942-4944 zone and thereafter slide may continue up to 4909-4911 zone by non-stop.
Below 4978 level, expect profit booking up to 4942-4944 zone and thereafter slide may continue up to 4909-4911 zone by non-stop.
Hurdle at 5008 level. Above this level, rally may continue up to 5020-5022 zone by non-stop.
Cross above 5053-5055 zone, can take it up to 5087-5089 zone by non-stop. Supply expected at around this zone and have caution.
On Negative Side, rebound expected at around 4876-4878 zone. Stop Loss at 4842-4844 zone.
Short-Term Investors:
Bullish Trend. 3 closes above 4797.20 level, it can zoom up to 5160.80 level by non-stop.
BSE SENSEX:
Lower 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.
INVESTMENT BUY:
Buy TAINWALA CHEM (BSE Cash)
Something cooking, but bulls may lose control today.
1 Month: Selling should continue, as per current indications.
3 Months: Bullish, as per current indications.
1 Year: Surprisingly going up, opposite to bearishness.
Buy KIRL FERROUS IND (BSE Cash)
Something cooking, bulls may hold on gains today.
1 Month: Surprisingly going up, opposite to bearishness.
3 Months: Surprisingly going up, opposite to bearishness.
1 Year: Bullish, as per current indications.
Buy TAINWALA CHEM (BSE Cash)
Something cooking, but bulls may lose control today.
1 Week: Bullish, as per current indications.
1 Month: Selling should continue, as per current indications.
3 Months: Bullish, as per current indications.
1 Year: Surprisingly going up, opposite to bearishness.
Buy KIRL FERROUS IND (BSE Cash)
Something cooking, bulls may hold on gains today.
1 Week: Surprisingly going up, opposite to bearishness.
1 Month: Surprisingly going up, opposite to bearishness.
3 Months: Surprisingly going up, opposite to bearishness.
1 Year: Bullish, as per current indications.
NIFTY FUTURE LEVELS
4978
4942
4909
4876
4842
RESISTANCE
5008
5022
5055
5089
Buy TAINWALA CHEM;KIRL FERROUS IND
4978
4942
4909
4876
4842
RESISTANCE
5008
5022
5055
5089
Buy TAINWALA CHEM;KIRL FERROUS IND
Reliance Infratel
-Files DRHP for 15.6 crore shares with SEBI
-To offer 10.05% of post diluted equity via IPO
-Reliance Communication will continue to own 85% post issue
-Files DRHP for 15.6 crore shares with SEBI
-To offer 10.05% of post diluted equity via IPO
-Reliance Communication will continue to own 85% post issue
stocks that are in news today:
-Sesa Goa's $500 million FCCB issue opens
-Reliance Infra, Sterlite, Lanco Infratech bid for PFC's Rs 1800 crore transmission project
-US court denies Wyeth's appeal to block sale of generic version of Zosyn by Orchid Chemical – BS
-M&M may buy Kirloskar Oil's 17.39% stake in Swaraj Engines, raising stake from 33.2% - BS
-Great Offshore says not received any offer from Bharati, ABG Shipyard
-Saif III Mauritius reduces stake in Mind Tree by 4.37% to 0.6% via block deal
-Nagarjuna Construction to raise Rs 600 crore via private placement of shares – FE
-Spice Communication gets shareholder approval for merger with Idea
-Videocon looking to spin off its oil & gas exploration Wahoo field block into separate company and then monetize it: DNA ((it's a 50:50JV with BPCL))
-Fortis receives SEBI nod for raising Rs 997 crore via rights issue – Mint
-Infosys expected to bag a Rs 900 crore contract after merger of UK's T-mobile and Orange Telcos: DNA Money
-Great Offshore says not received any offer from Bharati, ABG Shipyard
-Saif III Mauritius reduces stake in Mind Tree by 4.37% to 0.6% via block deal
-Nagarjuna Construction to raise Rs 600 crore via private placement of shares – FE
-Spice Communication gets shareholder approval for merger with Idea
-Videocon looking to spin off its oil & gas exploration Wahoo field block into separate company and then monetize it: DNA ((it's a 50:50JV with BPCL))
-Fortis receives SEBI nod for raising Rs 997 crore via rights issue – Mint
-Infosys expected to bag a Rs 900 crore contract after merger of UK's T-mobile and Orange Telcos: DNA Money
Strong & Weak futures
This is list of 10 strong futures: IOC, Uco Bank, Orchid chem, Dena Bank, Allahabad Bank, HCC, Ranbaxy, Bharat Forg, Jindal Saw & Lic house. And this is list of 10 Weak futures: TV-18, Tulip, Finance Tech, Suzlon, MTNL, Nagarjuna Fertil, United Phosphoro, GVK Power, Rural Elec & Tata Comm.
Nifty is in Up trend
NIFTY SPOT LEVELS TODAY
 | 4986.55 | ( 0.33 %) | 16.60 |  |
| 1 | 2 | 3 | ||
| Resistance | 5034.15 | 5081.75 | 5146.80 | |
| Support | 4921.50 | 4856.45 | 4808.85 | |
 | 16781.43 | ( 0.37 %) | 61.93 | | |
| 1 | 2 | 3 | |||
| Resistance | 16912.05 | 17042.66 | 17251.23 | ||
| Support | 16572.87 | 16364.30 | 16233.69 | ||
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 24-Sep-2009 | 5772.87 | 4711.35 | 1061.52 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 24-Sep-2009 | 1593.65 | 2210.42 | -616.77 |
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,707.44. Down by 41.11 points.
The Broader S&P 500 closed at 1,050.78. Down by 10.09 points.
The Dow Jones Industrial Average closed at 9,707.44. Down by 41.11 points.
The Broader S&P 500 closed at 1,050.78. Down by 10.09 points.
The Nasdaq Composite Index closed at 2,107.61. Down by 23.81 points.
The partially convertible rupee INR=IN ended at 47.95/96 per dollar on yesterday, stronger than Wednesday's close of 47.98/48.00.
Interesting findings on web:
Stocks fell for a second day Thursday after the Federal Reserve announced plans to start unwinding some stimulus measures and a report showed existing-home sales fell last month.
Interesting findings on web:
Stocks fell for a second day Thursday after the Federal Reserve announced plans to start unwinding some stimulus measures and a report showed existing-home sales fell last month.
The market shrugged off solid demand for the seven-year Treasury auction, as well as an earlier report that showed an unexpected drop in jobless claims last week.
Wall Street slumps as existing home sales report shows a surprise slide. S&P 500 down about 2% in two days.
Existing home sales fell to a seasonally adjusted 5.1 million unit rate in August from a 5.24 million unit rate in July, according to a report from the National Association of Realtors. Economists surveyed by Briefing.com forecast that sales would rise to a 5.3 million unit rate in the month.
Stocks slumped Thursday, falling for the second straight session, as a surprise drop in existing home sales and tumbling commodity prices gave investors a reason to sell into a rally that pushed the major gauges to one-year highs.
The Dow Jones industrial average fell 41.11, or 0.4 percent, to 9,707.44
The Standard & Poor's 500 index fell 10.09, or 1.0 percent, to 1,050.78
RUSSELL601.75-11.62-1.89%.
The Nasdaq composite index fell 23.81, or 1.1 percent, to 2,107.61
For the week:
The Dow is down 112.76, or 1.1 percent.
The S&P is down 17.52, or 1.6 percent.
The Nasdaq is down 25.25, or 1.2 percent.
For the year:
The Dow is up 931.05, or 10.6 percent.
The S&P is up 147.53, or 16.3 percent.
The Nasdaq is up 530.58, or 33.6 percent.
Declines were broad based, with 2 out of every 3 Dow stocks sliding, including GE (GE, Fortune 500), Alcoa (AA, Fortune 500), Bank of America (BAC, Fortune 500), Chevron (CVX, Fortune 500), Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Hewlett-Packard (HPQ, Fortune 500) and United Technologies (UTX, Fortune 500).
Stocks gained in the early going after the Labor Department reported that jobless claims fell for the third week in a row. But the market abandoned gains after the housing report. A slide in oil and gold shares on the back of a stronger dollar dragged on commodity stocks.
A report from the Labor Department showed weekly jobless claims fell for the third week in a row. The number of Americans filing new claims for unemployment fell to 530,000 last week from a revised 551,000 in the prior week. Economists thought claims would rise by 5,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 6,138,000 from 6,261,000 in the previous week. Economists expected a rise.
"I do think we'll eventually reach 10,000 but I think it's going to take a while longer than people expect," Peter Costa of Empire Executions said on CNBC. "Right now we're in a consolidation phase ... and it's gonna take time to get through it," he said, adding that he thinks the Dow will reach 10,000 in early October.
In the short term, "there's not a whole lot of bad news that could derail equities," said Robert Siewert, portfolio manager at Glenmede. "But the rally since March has been the sharpest since the 1930s and it's not surprising to see occasional pullbacks."
However, Siewert said that longer term, there are a lot of headwinds that could challenge stocks, with 2010 likely a tougher year for equities. He cited challenges including the eventual rising of taxes, the labor market weakness, the still-tight credit market and the struggle of a consumer that chooses to save at the expense of personal spending.
Rattling some investors, the Fed said it was scaling back two emergency-lending programs: It's paring its 28-day term-auction facility to $25 billion from $75 billion as well as its 84-day TAF, a program to offer banks access to short-term emergency funds that it's considering eliminating early next year.
"These schedules are consistent with the intention ... to gradually scale back these facilities in response to continued improvements in financial markets," the Fed said in a statement.
The moves of the past few days highlight just how conflicted investors are: On one hand, they want to see signs of an economic recovery. On the other, they're somewhat disturbed by the idea that the Fed may tighten sooner rather than later.
Since the Fed meeting, the dollar has rebounded and gold and crude have declined, with gold falling below $1,000 and crude settling below $66 a barrel today.
The largest run of initial public offerings to hit Wall Street in two years accelerated.
Shares of A123 Systems (AONE) surged as much as 56.6% from their initial pricing, before trimming the gain to just over 50% at the close. The company, one of a small group of electric-car battery makers, raised $380 million in an initial public offering Wednesday that priced above forecasts. The company trades under the ticker symbol AONE.
A123 was one of 5 companies that went public Thursday, the biggest day for the IPO market since Nov. 15, 2007, when 6 debuted.
Among the other debuts, online pharmacy Vitacost.com (VITC) was little changed Thursday and asset management firm Artio Global Investors (ART) added 4.8%.
Two REITs also debuted: Apollo Commercial Real Estate Finance (ARI), which fell 7.5% Thursday, and Colony Financial (CLNY), which fell 2.5%.
Three more IPOs are due by the end of the week and eight over the next two weeks. The recharged market could be seen as another indicator that a broader economic recovery is taking hold. Alternately, it could attest to how few financing options are available to companies.
Rite Aid (RAD, Fortune 500) reported its ninth consecutive quarterly loss Thursday morning, although the results were not as weak as analysts had expected. However, the drugstore chain also said it would see a wider fiscal-year loss than it initially thought because of falling sales.
Shares fell 12.3%.
In company news Thursday, Bed Bath & Beyond (BBBY) posted second-quarter earnings per share (EPS) of $0.52, vs. $0.46 one year earlier, on a 3.3% total sales rise. Same-store sales fell slightly. Wall Street was looking for $0.48 EPS.
Red Hat (RHT) reported second-quarter non-GAAP EPS of $0.20, vs. $0.14, on a 12% revenue rise. Deferred revenue rose 17% to $581 million. Red Hat posted $0.15 GAAP EPS. The company said financial performance was strong across all of its key metrics.
Paychex (PAYX) reported first-quarter EPS of $0.34, vs. $0.41, on a 6% total revenue decline. The company said weak economic conditions, the credit crisis in the financial markets, and extremely low investment rates of return continue to challenge financial results for fiscal 2010. It sees a fiscal 2010 total revenue decline of 2%-5%, and a net income decline of 10%-12%.
McCormick & Co. (MCK) reported third-quarter earnings per share of $0.57, vs. $0.52, on a 1% sales rise (6% in local currency). The company reaffirmed its 2%-3% 2009 sales growth forecast; based on strong year-to-date profit performance and a positive outlook for the upcoming holiday season, the company narrowed its 2009 EPS forecast to $2.26-$2.28 from $2.24-$2.28.
Electronic Arts [ERTS 19.29 -0.54 (-2.72%) ] shares tumbled 2.7 percent after Microsoft [MSFT 25.94 0.23 (+0.89%) ] shot down talk that it might take over the videogame maker.
Natural-resource stocks took a hit: Caterpillar [CAT 51.85 -1.29 (-2.43%) ] and Chevron [CVX 70.71 -0.66 (-0.92%) ] were among the biggest drags on the Dow.
Citigroup [C 4.43 -0.09 (-1.99%) ] dropped 2 percent following a report in the Wall Street Journal that the bank is planning to narrow the focus of its branch network to six major metropolitan areas. The bank will focus on New York, Washington, Miami, Chicago, San Francisco and Los Angeles, paring business in Boston, Philadelphia and Texas.
But Ford [F 7.33 -0.03 (-0.41%) ] slipped after JP Power & Associates said expects auto sales to plunge in September, back to their worst levels of 2009, as the glow of the "Cash for Clunkers" program has worn off.
Amid talk that it could be another terrible holiday season, there was a bright spot for retailers: Goldman Sachs upgraded its price targets on several retailers, saying it thinks September-to-date trends are robust and could continue into the holiday season. Among those Goldman raised its price target on were: Abercrombie & Fitch [ANF 32.56 -0.44 (-1.33%) ], AnnTaylor [ANN 15.56 -0.72 (-4.42%) ] and Chico's FAS [CHS 12.72 -0.47 (-3.56%) ].
Homebuilders took a hit after the disappointing existing-home sales report and ahead of tomorrow's new-home sales reading. Beazer [BZH 5.78 -0.24 (-3.99%) ] and Hovnanian [HOV 4.17 -0.30 (-6.71%) ] fell sharply.
Among other movers, Chelsea Therapeutics (CHTP) tumbled 60% after its experimental drug to treat a neurological disorder showed disappointing results in a late-stage trial.
Apple Inc. (AAPL) and some other tech names were up on a FASB accounting change that could boost reported results for some firms in the sector.
Blackberry maker Research In Motion [RIMM 83.126 -2.644 (-3.08%) ] lost more than 3 percent ahead of its earnings, which came after the bell.
RIMM beat its earnings target but missed the mark on sales and shares fell about 10 percent after-hours. The stock had risen nearly 20 percent since July amid hopes that the recovery would spur business and consumer spending on technology.
Friday brings government reports on new home sales and durable goods orders, as well as the University of Michigan's September consumer sentiment index.
Despite predictions of a big September selloff, stocks have seen only modest pullbacks that have been met with renewed buying.
The Group of 20 leading developed and emerging countries are meeting in Pittsburgh to discuss financial reforms in the wake of the global financial market collapse. It is the third such meeting, following earlier events in April and last November.
The market was watching the start of the meeting of the Group of 20 industrialized nations in Pittsburgh. U.S. President Barack Obama was expected to push for a global economic rebalancing, while French President Nicolas Sarkozy was emphasizing pay caps for executives in the financial sector.
Reuters reported German Chancellor Angela Merkel warned a U.S. drive to rebalance the global economy risked distracting the G20 from a more urgent need for market regulation. Merkel's remarks underscored differences between some of the world's largest economies as she, U.S. President Barack Obama and other G20 leaders headed for talks on how to respond to the global financial crisis.
S&P 500 - Risers
Cintas Corp. (CTAS) $30.20 +6.53%
Citrix Systems Inc. (CTXS) $37.66 +4.20%
Limited Brands Inc. (LTD) $17.88 +2.82%
Slm Corp. (SLM) $8.85 +2.55%
Carnival Corp. (CCL) $33.95 +2.51%
S&P 500 - Fallers
Eastman Kodak Co (EK) $4.71 -9.07%
Prologis Sbi (PLD) $11.65 -8.48%
A K Steel Holdings Corp. (AKS) $21.15 -7.36%
Developers Diversified Reality (DDR) $9.02 -6.82%
Adv Micro Devices (AMD) $5.62 -6.64%
Dow Jones I.A - Risers
McDonald's Corp. (MCD) $56.25 +1.28%
Travelers Company Inc. (TRV) $47.87 +1.23%
Microsoft Corp. (MSFT) $25.95 +0.91%
American Express Inc. (AXP) $33.85 +0.74%
Wal-Mart Stores Inc. (WMT) $50.70 +0.60%
Dow Jones I.A - Fallers
Alcoa Inc. (AA) $13.50 -4.53%
Bank Of America Corp. (BAC) $16.97 -3.03%
Caterpillar Inc. (CAT) $51.57 -2.95%
General Electric Co. (GE) $16.50 -2.94%
Du Pont E I De Nemours and Co. (DD) $32.27 -2.60%
VIX24.951.46+6.22%.
Oil,Gold & Currencies:
U.S. light crude oil for October delivery fell $3.08 to settle at $65.98 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery fell $15.50 to settle at $998.90 an ounce. Gold closed at a record high of $1,020.20 last week.
The dollar gained versus the euro and the yen.
The dollar and yen rose against the euro amid speculation that Group of 20 leaders will agree to temper riskier investments, boosting demand for so-called safe- haven currencies.
The dollar gained versus 15 of its 16 major counterparts as U.S. officials said they supported a plan to tighten capital requirements and force banks to tie compensation more closely to risk. The yen headed for a weekly advance versus the euro on prospects Japanese companies will keep bringing home earnings on overseas assets before the end of the half fiscal year.
"Worries the G-20 may impose stricter financial market regulations are causing risk aversion," said Toshihiko Sakai, head of trading for foreign exchange and financial products at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. "There's safe- haven buying of the dollar and the yen."
The dollar advanced to $1.4644 per euro as of 11:24 a.m. in Tokyo from $1.4666 yesterday in New York. It rose to 1.0307 Swiss francs from 1.0298 francs, and strengthened to C$1.0900 from C$1.0892.
The yen climbed to 132.83 per euro from 133.86 in New York yesterday, after earlier reaching 132.73, the highest level since Sept. 16. It rose to 90.69 per dollar from 91.27.
G-20 leaders are ready to clamp down on banker pay as they seek to curb the risk-taking behavior that helped trigger the global financial crisis. The collapse of the U.S. property market in 2007 led to the global recession and resulted in $1.62 trillion of writedowns and credit losses at banks and other financial institutions, according to data compiled by Bloomberg.
Excessive 'Games'
"There will be broad agreement around many elements of a compensation package," Michael Froman, U.S. President Barack Obama's liaison to the G-20, told Bloomberg Television. Treasury Secretary Timothy Geithner promised "a far-reaching set of standards" that would take effect immediately. The G-20 kicked off a two-day meeting yesterday in Pittsburgh.
The dollar and yen, commonly used as funding currencies for higher-yielding assets, rose after new Japanese Prime Minister Yukio Hatoyama, speaking before the United Nations General Assembly, pledged cooperation with other G-20 leaders in reducing income disparity and "excessive money-making games."
Federal Reserve Governor Kevin Warsh said the U.S. central bank may need to be as aggressive in reversing its money-easing actions to revive the economy and financial markets as policy makers were in starting them.
"If 'whatever it takes' was appropriate to arrest the panic, the refrain might turn out to be equally necessary at a stage during the recovery to ensure the Federal Reserve's institutional credibility," Warsh said in an opinion piece posted late yesterday on the Wall Street Journal's Web site.
Policy Pullback
The Federal Reserve and U.S. Treasury said yesterday they're scaling back emergency programs aimed at combating the financial crisis, reducing support for firms that now have an easier time getting funding.
European policy makers are also moving to withdraw stimulus. The European Central Bank said it will discontinue its 84-day U.S. dollar liquidity-providing operations with the Fed "given the limited demand and the improved conditions in funding markets." The ECB will keep conducting seven-day dollar operations.
Dollar Carry
"The announcements by these central banks triggered buy- backs of the dollar, which was used to finance investments on riskier assets," said Fumio Mizutani, a currency analyst at currency-margin company ODL Japan Co. "We now need to carefully ascertain whether this action will affect dollar-carry investments."
In carry trades, investors borrow in a nation with low interest rates and invest where returns are higher. The risk in such trades is that currency market moves will erase profits.
Benchmark interest rates are 2.5 percent in New Zealand and 3 percent in Australia, compared with 0.1 percent in Japan and as low as zero in the U.S, making investments in the South Pacific nations' comparatively attractive.
The pound dropped after the Newcastle Journal reported yesterday that Bank of England Governor Mervyn King said the pound's decline is "very helpful" in rebalancing the U.K. economy.
"The pound was the star of all the currencies that fell today," said Takashi Kudo, director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp.
The pound fell to as weak as $1.5918 today, the lowest since June 8, from $1.6059 yesterday in New York. The U.K. currency dropped to 91.93 pence per euro, reaching the weakest level since April 1.
Repatriation
Japan's currency is set for a weekly advance versus 11 of its 16 major counterparts on prospects the nation's exporters will take advantage of an April 1 rule change that waives taxes on repatriated profits. Under previous laws, companies had to pay a combined 40 percent tax on overseas earnings. The first half of Japan's fiscal year ends Sept. 30.
"Yen repatriation by Japanese firms is likely to continue today and next week," said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. "The bias is for the yen to rise" to 90.50 per dollar and 133.30 per euro today, he said.
Japanese exports fell 36 percent in August from a year earlier, the Finance Ministry said yesterday, an 11th-straight decline. The drop was exacerbated by the yen's 17 percent surge against the dollar in the past year, making Japanese goods more expensive abroad and lowering the value of repatriated earnings.
"We're affected by exchange rates, there's no doubt about it," said Paul Nolasco, a Tokyo-based spokesman at Toyota, which based its earnings estimates on the assumption that the yen will trade at an average of 92 to the dollar in the next six months. The automaker forecasts a 450 billion yen ($5 billion) net loss for the year ending March 2010.
Large manufacturers expected the yen to trade at an average of 94.85 per dollar in the 12 months to March 2010, according to the Bank of Japan's quarterly Tankan survey released July 1.
Bonds:
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.38% from 3.41% late Tuesday. Treasury prices and yields move in opposite directions.
What to expect:
FRIDAY: Durable-goods orders; consumer sentiment; new-home sales; Earnings from KB Home
Friday, Sept. 25 Forecast Previous (As revised)
8:30 am Durable goods orders Aug. 0.7% 5.1%
10 am New home sales Aug. 440,000 433,000
10 am Consumer sentiment Sept. 70.5 70.2
Asia:
Asian stocks dropped, dragging the MSCI Asia Pacific Index to its biggest weekly decline in a month, after Nomura Holdings Inc. announced a record $5.6 billion share offering and sales of existing U.S. homes unexpectedly declined.
Nomura, Japan's largest brokerage, had yet to trade as sell orders outnumbered bids to buy by three to one in Tokyo. Mitsubishi UFJ Financial Group Inc., the nation's biggest publicly traded bank, slid 5 percent. Honda Motor Co., which gets 47 percent of its sales in North America, lost 2.5 percent. BHP Billiton Ltd., the world's biggest mining company, sank 1.8 percent in Sydney after metal and oil prices fell.
The MSCI Asia Pacific Index fell 1.6 percent to 116.73 as of 12:07 p.m. in Tokyo. The gauge dropped 1.4 percent this week, the most since the period ended Aug. 21. It has surged 65 percent from a five-year low on March 9 on speculation improved global growth will boost corporate earnings.
"Investors are feeling twitchy," said Shane Oliver, head of investment strategy with AMP Capital Investors Ltd., which manages about $78 billion. "There's been some disappointing economic data and talk of exit strategies. The market worries that the withdrawal of stimulus will be premature, and that the recovery will be threatened when the punchbowl gets taken away."
Japan's Nikkei 225 Stock Average slumped 2.9 percent to 10,239.05. Australia's S&P/ASX 200 Index futures lost 0.5 percent, while South Korea's Kospi sank 1.5 percent.
Aiful Surges
Emeco Holdings Ltd., an Australian earthmoving company, tumbled 14 percent after ending takeover talks. New Zealand's Fisher & Paykel Appliances Holdings Ltd. slumped 11 percent on a loss forecast. Among gainers today, Aiful Corp., Japan's second- largest consumer lender by assets, surged 21 percent after Nikko Citigroup Ltd. raised its stock rating.
Futures on the Standard & Poor's 500 Index rose 0.2 percent. The gauge dropped 1 percent yesterday after a report from the National Association of Realtors showed sales of existing U.S. homes dropped 2.7 percent last month, while economists had anticipated an increase. Separately, the Federal Reserve said it will cut the size of two programs meant to boost credit markets.
Signs that government stimulus measures worldwide were reviving economies hit by the credit crisis have driven the MSCI World Index up by 62 percent from a 13-year low on March 9. The MSCI Asia Pacific Index's rally since then has lifted the average price of the gauge's members to 1.6 times book value from 1 at this year's low.
The Group of 20 nations today conclude a two-day meeting in Pittsburgh on measures to help prevent the risk-taking that triggered the worst financial crisis since the Great Depression. U.S. officials said they were uniting behind a plan to force banks to tie compensation more closely to risk and tighten capital requirements.
Credit Crunch
Nomura shares weren't allowed to trade until there is a balance of bids and offers, according to exchange rules. Offers to sell outnumbered bids by about three to one at 573 yen, compared with the close yesterday of 681 yen.
The company plans to sell a record 511.3 billion yen ($5.6 billion) of stock to fund expansion in the U.S. The Tokyo-based brokerage will sell about 800 million shares, equivalent to almost 30 percent of the stock outstanding, according to documents filed to the Ministry of Finance.
Nikko Citigroup Ltd. downgraded Nomura to "sell" from "hold." Mitsubishi UFJ slumped 5 percent to 495 yen.
"Investors are increasingly wary major financial companies will enter another round of equity sales," said Tsutomu Yamada, at Tokyo-based kabu.com Securities Co.
Aiful, which said yesterday it plans to cut jobs and close branches to cut costs, surged 21 percent to 123 yen after Nikko Citigroup raised it to "hold" from "sell," as concerns over near-term funding "dissipate."
Struggling To Borrow
The company has been shut out of credit markets by the global financial crisis and is increasing provisions for repayments of interest charges. Minutes released today showed Bank of Japan board members last month remained concerned that small companies are struggling to borrow.
The global credit crunch, worsened by the collapse of Lehman Brothers Holdings Inc. a year ago, has caused more than $1.6 trillion of writedowns and losses at the world's biggest financial institutions. The MSCI Asia Pacific Index slumped by a record 43 percent in 2008.
Honda sank 2.5 percent to 2,795 yen after the unexpected decline in home sales, which also caused commodity prices to fall. Toyota Motor Corp., the world's No. 1 automaker, dropped 2.9 percent to 3,700 yen.
BHP fell 1.8 percent to A$37.03. Rio Tinto Group, the world's third-largest mining company, slumped 2.3 percent to A$59.52. Inpex Corp., Japan's largest oil explorer, lost 3.5 percent to 778,000 yen. Crude oil dropped 4.5 percent in New York yesterday to $65.89 a barrel, the lowest settlement since July 29, while copper slid 3.5 percent.
'The Market's Overbought'
Newcrest Mining Ltd., Australia's biggest gold producer, declined 1.6 percent to A$33.06, after gold futures closed below $1,000 an ounce. Rival St. Barbara Ltd. sank 6.9 percent to 27 Australian cents.
"We've been saying for a while that the market's overbought," said Rob Patterson, who helps manage $3.3 billion at Argo Investments Ltd. in Adelaide. "There's been a fair push with this rally, and it's due for a rest."
Emeco tumbled 14 percent to 80.5 Australian cents in Sydney, after the company ended takeover talks and a proposed offer by a financial investment firm was withdrawn. Fisher & Paykel Appliances slumped 11 percent to 66 New Zealand cents, after the nation's largest maker of cookers and refrigerators forecast a full-year loss on weaker than expected U.S. sales.
Nikkei 22509/25 - 11:00. 10,239.05 -305.17 ( - 2.89%).(08.32 AM IST).
Japanese government bonds gained on Friday, with futures hitting a 10-day high as Tokyo's Nikkei stock average .N225 slid 2.9 percent on concerns over the Japanese financial sector.
HSI 20824.14 -226.59 -1.08%.(08.34 AM IST)
By 0243 GMT, the benchmark Hang Seng Index was down 0.96 percent at 20,847.86.
SSE Composite 2853.55 2824.53 2848.74 2823.95 -1.02.(08.43 AM IST)
China's key stock index opened down 0.59 percent on Friday, with metal stocks generally weakerfollowing news of EU tariffs, ending a short-lived technical bounce on Thursday.
The Shanghai Composite Index fell to 2,836.699 points after closing up 0.4 percent on Thursday.
Trading was sluggish with the approach of an eight-day holiday starting on Oct. 1, the country's National Day, seen as a major political event as it marks the 60th anniversary of the founding of the People's Republic of China.
Traders see little chance for the main index to regain the psychologically important 3,000 point level before the holiday as trading thins out. However, they believe the index may find firm support at a three-month low of 2,639, hit on Sept. 1.
Metal stocks were generally down after news that the European Union decided to impose five-year anti-dumping tariffs on aluminium foil from three countries including China, and on Chinese seamless steel pipes.
Top steel maker Baoshan Iron and Steel opened unchanged at 6.65 yuan while Aluminum Corp of China Ltd (Chalco) fell 1.6 percent to 12.91 yuan.
Chinese stocks open 0.59% lower on Fri
Chinese stocks opened lower on Friday morning.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,836.7 points, down 0.59% or 16.85 points from the previous closing.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.82% or 93.73 points lower at 11,382.15 points
Airbus to hand over 80 aircraft to China this year.
China Telecom to offer one-way charging services.
China Everbright Int'l to sell 480 mln shares.
CIC in talks with IDB on US$1 bln co-financing: report.
Bosch and Siemens to expand investment in China.
JPMorgan Chase cuts stake in Bank of China.
Hembly Int'l buys garbage power firm for HK$1.16 bln.
Duke Energy, ENN Group ink deal for clean energy technology.
AVIC inks cooperation agreement with Safran.
Beijing Capital Land's contracted sales up 269% in Jan-Aug.
Luneng Taishan Cable, SWCC Showa to set up JV.
Air China Cargo launches flight to Europe.
Nanya approved to issue 800 mln ordinary shares.
Walter Kwok cuts stake in SHKP to 42.42%.
Protectionism could lead to trade wars, distorts economic growth, expert says
The protectionism decision to increase Chinese tire tariff could not only lead us down the road to a scaled-up trade war, but also distort economic growth and ultimately make consumers suffer, A U.S. trade expert said Thursday.
In an interview with Xinhua in Chicago, Marshall P. Eldred, president of a Chicago-based international trading company Golden Hill Foods, said this could potentially have a negative impact on trade relations.
"Every action has a reaction. This could lead to further protectionism on China's part. At the very least, this sort of protectionist policy creates a tense trade environment," he said.
Eldred has been in international trade and distribution for 20 years. His company, Golden Hill Foods, imports spices and other food ingredients from around the world including China.
Eldred believes that trade protectionism in general distorts economic growth by supporting uncompetitive industries. He said, "in this case, the tire tariff will have a negative impact on the auto industry as automakers seek the least expensive alternatives for inputs. Ultimately the U.S. consumers will suffer as they will not have access to the lowest possible price for cars. "
As an importer of food ingredients, Eldred is concerned that this decision may inspire more cases of U.S. producers looking for protection against less expensive imports from China and elsewhere.
Regarding the impact on U.S. consumers, he said: "It's a slippery slope that could lead to big increases in U.S. protectionism. In the end, U.S. consumers will feel it in their wallets when they realize that they can't afford to buy the same quality cars, TVs, appliances, clothing and other consumables. They will certainly let their feelings be known in the ballot box. The end result is volatility both politically and economically."
Eldred suggested that this trade dispute should be addressed and dealt with at the WTO level to prevent escalation into other sectors of the economy.
He further pointed out that in today's interwoven global economy a thorough cost-benefit analysis needs to be conducted to understand what the true "downstream" effects are of punitive tariffs levied on imports to satisfy one interest group or another.
He gave an example of the handful U.S. tire companies operating in China now. "How does this decision affect them? How about rubber futures on the global commodity exchanges? And does this have a significant effect on raw material suppliers to related industries? " he questioned.
Further commenting U.S.-China trade relations, Eldred said, "like it or not, the U.S. and China are partners in dealing with geo-political issues around the world. Our dealings with China on the economic front have an impact on how we work together as partners on issues such as North Korea, Iran and an assortment of regional conflicts. If we are dealing with China in a way that is perceived as completely self-interested, then they will reciprocate in kind with regards to these issues."
Regarding the next step for U.S. President Barrack Obama's administration in international trade issues, Eldred recommended them to push for reopening of the Doha round of world trade talks. He said, "this would show good faith in an effort to address some of the unsolved issues around global trade, particularly with respect to developing markets attempts to gain access to areas of the US economy previously protected."
Being an international trade businessman for about 20 years, Eldred always has the belief that trade among countries is imperative to raising up the quality of life for everyone. He said," without international trade, consumers would be limited to products produced in their own countries. We are an increasingly consumer-driven world economy and thus international trade is increasing in importance."
"As the world continues to globalize, economies will seek the most cost effective inputs to increase the well being of its citizens. Trade wars distort that growth and ultimately consumers suffer," he stressed.
Japanese gov't to launch task force to revive JAL: report
The Japanese government plans to form a task force to help revive struggling Japan Airlines Corp., Kyodo News reported Friday, citing government sources.
The unit is likely to consist of some key members of the now-defunct Industrial Revitalization Corp. of Japan (IRCJ), including Shinjiro Takagi, who served as chairman of the IRCJ's decision-making panel, and Kazuhiko Toyama, who was the IRCJ's chief operating officer.
The IRCJ assisted heavily indebted but otherwise viable firms from 2003 to 2007.
On Thursday, JAL President Haruka Nishimatsu asked Transport Minister Seiji Maehara for a capital injection of public funds to keep the troubled carrier flying.
Maehara later told reporters that he was not convinced JAL's rehabilitation plan will work. And it "lacks specifics and feasibility," he said.
JAL, which posted a record group net loss of 99.04 billion yen (1.09 billion U.S. dollars) in the April-June quarter, was asked to come up the rehabilitation plan by the end of September.
In June, it reached an agreement with the Development Bank of Japan and other lenders for a loan of about 100 billion yen (1.10 billion dollars), partially guaranteed by the government.
It is planning to seek an additional loan of 100 billion yen after submitting the rehabilitation.
G8 Nations Will No Longer Meet Separately, Without G20
The G8 nations will announce Friday that they will no longer meet separately without the entire G20.
NBC's Chuck Todd reports, the G8 nations will instead meet the night before any G20 meeting, particularly when it comes to national security issues that historically the G8 has dealt with.
According to the White House, the G8 is not being dissolved.
Instead it will conduct its meetings combined with G20 meetings – which means it will hold only one meeting annually.
China is not a member of the G8 nations.
South Korea is likely to be the venue for next year's G20 meeting.
That will be when the G8 nations will meet next under this new umbrella.
Market Insider: RIM Could Trip Up Stocks, Friday
Research In Motion's earnings could cast a cloud over Wall Street, Friday.
RIM [RIMM 83.126 -2.644 (-3.08%) ] stock fell sharply after hours on a disappointing third quarter revenue forecast. Second quarter revenues and unit shipments were also below expectations. Traders say as RIM earnings came out just after 4 p.m., S&P 500 futures moved lower.
RIM earned $475.6 million, or $0.83 per share, in the second quarter on revenues of $3.53 billion, below an estimated $3.63 billion.
"We were up five bucks in the S&Ps, but then after the stocks closed we (futures) went right back down to 1044," said Patrick Kernan, who trades S&P 500 options. "It could be parallel to RIM. I think it's a bad sign for the next couple of days...just because we had two days in a row where we just closed on an ugly note, and of the last couple of weeks, we had been pushing them (futures) higher."
Apple [AAPL 183.82 -1.68 (-0.91%) ], a RIM rival, also moved lower after the bell, in sympathy with RIM. RIM has been a high flier, doubling its share price since March on expectations for its blackberry products. Hewlett-Packard [HPQ 46.87 -0.06 (-0.13%) ] shares slipped also, after the company forecast 2010 revenue will be up just 3 percent, below Wall Street estimates.
Stocks Thursday finished lower after trading down on a surprise drop in existing home sales, released at 10 a.m. The market had initially been higher on reports that jobless claims were 530,000, about 20,000 better then expected. The Dow finished off 41 points at 9707, and the S&P 500 slid 10 to 1050. Nasdaq was off more than a percent at 2107.
The dollar was higher against a basket of currencies and up 0.7 percent against the euro, at $1.4656. Oil was the big loser, down another 4.4 percent to $65.89 per barrel, on news of rising supply.
As stocks sold off, buyers loaded up on Treasuries, bought dollars and sold commodities.
"I think this is just corrective, and the Fed made it clear yesterday, it's not taking the punch bowl away yet," said Marc Chandler, chief currency strategist at Brown Brothers Harriman.
The Fed did, however, announce it was scaling back two of the emergency lending programs it established during the worst of the financial crisis. The Fed is cutting back the amount of money available to banks in short term loans under the Term Auction Facility. It is also planning to cut back on a program that allows investment firms to temporarily swap risky assets for Treasuries.
"The Fed is slowly unwinding some if its liquidity provisions, but if the market was judging the pullback of liquidity was too fast and too much, we'd see a big pull back in equities and we wouldn't see buying in bonds," he said.
Treasuries saw buyers on pretty decent volume Thursday, as well as a robust auction of $29 billion in 7-year notes. "There's a rising tide of demand. It's absolutely impressive. What's really interesting about the auction process is supply really does beget demand," said Bill O'Donnell, head of Treasury strategy at RBS.
Now that the auctions are over, he said the market is turning its focus to next Friday's September employment report.
"We could also start to see a little bit more liquidity as we get to quarter end," he said. O'Donnell said there could be pressure on bonds because of the quarter end but also because September 30 is the end of the second half in Japan. "There could be some repatriation out of Japan," he said.
What to Watch
Leaders of G-20 countries continue to meet in Pittsburgh. President Obama holds a press briefing there in the late afternoon.
Economic reports for Friday include durable goods for August, at 8:30 a.m. Consumer sentiment is at 9:55 a.m., and new home sales are at 10 a.m.
Fed Chairman Ben Bernanke speaks and takes questions before the Congressional Black Caucus Foundation at 9 a.m. Fed Gov. Kevin Warsh speaks at 1:15 p.m. in Chicago before the Chicago Fed's international banking conference.
In earnings news, KB Homes[KBH 18.54 -0.29 (-1.54%) ] reports ahead of the open.
RIM Shares Plunge as Sales, Outlook Disappoint
Research in Motion reported a profit that rose over last year and topped expectations, but sales fell short of forecasts and the Blackberry maker's shares plunged in late trading.
For its current third quarter ending Nov. 28, RIM also said it expects revenue of between $3.6 billion and $3.85 billion and a profit of between $1 and $1.08 per share. Before the company issued its outlook, analysts had expected third-quarter earnings of $1.05 a share on revenue of $3.9 billion.
Excluding one-time items, RIM earned $1.03 a share in its fiscal second quarter on sales of $3.53 billion, compared with 86 cents a share on sales of $2.58 billion in the same period last year.
Analysts who follow Research in Motion expected the company to turn in a profit of $1 a share on sales of $3.62 billion, according to a consensus from Thomson Reuters.
Research in Motion shares [RIMM 83.126 -2.644 (-3.08%) ] plummeted about 10 percent in extended trading Thursday. They closed at $83.13. Get after-hour RIM quotes here.
Since July the stock has risen more than 18 percent as investors anticipated a rebound in business and consumer spending boosting the company's performance. The stock has doubled since the end of last year.
"The numbers were pretty OK. Slight beat on the earnings line, but only a few pennies. Slight miss on the revenue line. I think most of the Street was looking for a beat there so obviously a miss. A miss isn't as good as a make and a make even might not have been good enough," said DSAM Consulting Analyst Duncan Stewart. "The guidance going forward on revenue certainly looks a little bit light, but there is a range there and it seems to be near the lower end."
The Waterloo, Ontario-based company is preparing to expand a smartphone line that already offers far more choices that either of its main rivals, Apple [AAPL 183.82 -1.68 (-0.91%) ] and Palm [PALM 16.15 -0.81 (-4.78%) ], analysts say.
Nick Agostino, an analyst with Research Capital, said the guidance and results raise questions about whether other smart phones like Apple's iPhone and Palm's Pre have been cutting into RIM's business.
"It wasn't a blow out quarter," Agostino said. "I think it will add fuel to the competition concerns."
Before the results, investors worried a sluggish economy in the United States and other big markets would cause companies to delay upgrades of the BlackBerry handsets used by their employees.
There was also concern that retail consumers—a growing segment of RIM's customer base—could opt for cheaper and less feature-rich mobile phones to save money.
Even so, RIM's shares have posted impressive gains this year as the economy began to show signs of stability. The stock has more than doubled since sliding to a year-low of $35.05 on the Nasdaq in March.
The company said that it expects to add between 4 million and 4.3 million new subscribers in the current quarter.
Chrysler's Comeback Plan and Hiring Outlook
After 3 months of kicking the tires and looking under the hood at Chrysler, CEO Sergio Marchionne is about to roll his game plan for fixing the troubled American auto maker.
The Marchionne presentation will focus not only on the broader topic of bringing Chrysler back to profitability, but also on a fresh brand strategy and the models he plans to add, build upon, and push over the next five years.
To implement the plan, Chrysler will reverse course and start hiring more workers, while asking some of it's current staff to put in overtime. In essence, Chrysler is going from playing defense to playing offense.
What's the game plan? Separate, clearly define brands.
It's long been a running joke in the auto industry. What's the difference between a Dodge Caravan and Chrysler Town and Country? The cup holders. The similar minivans have come to symbolize the problem with Chrysler and Dodge. Their line-ups have been, and continue to be, stocked with cars, minivans and SUV's that are trying to attract the same buyer. Sure, there have been a few models that have stood out and differentiated themselves (Chrysler 300C, Dodge Charger), but for the most part they have been indistinguishable, and largely forgettable. That will change, with each brand becoming more distinct.
Chrysler: Look for the brand to go more upscale from its current positioning. Company executives have talked about putting Chrysler on a level with Lincoln and even Cadillac. That's a lofty goal. If Chrysler is going to achieve that level, it will have its work cut out.
Dodge: To differentiate from Chrysler, look for Dodge to build off its performance background and emphasize driving dynamics and technology. If Dodge is going to be the mass market brand Marchionne envisions, it will have to turn around its track record of cranking out lackluster cars.
Jeep: It has the strongest brand name, and should be the easiest for Chrysler to parlay. A model like the Wrangler is a winner. Now Jeep needs to expand that success, especially on the lower end of the market.
Leveraging Fiat platforms
While Chrysler will not be importing and selling the entire line-up of Fiat models, it will be using Fiat platforms and technology to rapidly expand its offerings with fuel-efficient cars. That means building models in the A, B, and C segments that connect with buyers who traditionally have not considered Chrysler, Dodge, and Jeep models for fuel efficiency.
The smallest, the A platform models will be covered by the Fiat 500, and Fiat 500 convertible coming in early 2011. Six months later, look for models built off the platform used for the Fiat Panda, a popular hatchback in Europe.
In the C/D segment, where Chrysler offers the Dodge Caliber, Jeep Patriot and Jeep Compass, Fiat plans a flurry of new models including a mid-size crossover to hit showrooms by 2013 and a compact sedan.
Keep in mind, Fiat is not planning to simply replicate its models in the U.S. Nor will it ditch Chrysler, Jeep and Dodge models all together. In fact, I'm told a new Chrysler Sebring and Jeep Liberty are part of the early plans. Above all else, Fiat will use its expertise in small cars to help Chryslers three brands work their way into those segments. Its already making plans to transform its plants in Belvidere, Illinois and Toledo, Ohio to build B and C segment cars.
Come November, Marchionne will unveil his game plan publicly. Until then, he remains a CEO saying little about turning around Chrysler, but promising to match the success he has enjoyed at Fiat.
HP Offers 2010 Outlook in Line With Estimates
Hewlett-Packard said Thursday that its revenue and profit in its next fiscal year should be in line with what analysts were expecting.
The technology company's chief financial officer, Cathie Lesjak, told financial analysts that revenue should be between $117 billion and $118 billion in fiscal 2010, which starts Nov. 1.
HP's [HPQ 46.87 -0.06 (-0.13%) ] profit, excluding one-time items, is expected to be $4.20 to $4.30 per share.
Analysts polled by Thomson Reuters had been forecasting sales of $118 billion and profit of $4.25 per share.
Lesjak said HP's personal-computer business is expected to grow 3 percent to 5 percent over 2009, while its cash-cow printer-ink business could be flat to up just 2 percent.
HP's stock fell 6 cents to close at $46.87 before the outlook figures were announced. Stocks fell in extended trading.
ING to Sell Joint Venture to ANZ For 1.1 Billion Euros
Dutch banking group ING [ING 16.31 -0.44 (-2.63%) ] said on Friday it will sell its 51 percent equity stakes in ING Australia and ING New Zealand to joint venture partner Australia and New Zealand Banking Group (ANZ) for 1.1 billion euros ($1.6 billion) cash.
The sale, which is expected to close by the year-end, is part of the worldwide restructuring plan ING announced in April.
The company, which received state aid last October and a government asset guarantee in January, is in the process of raising 6-8 billion euros through asset sales.
ING said it would book a net profit of 300 million euros on the deal, which will also free up 900 million euros of capital.
The joint venture in insurance and wealth management was formed in 2002 and has 2,700 employees. It describes itself as the No.2 life insurer in Australia and the market leader in New Zealand.
ING said in a statement it will continue to focus on life insurance and retirement services products in Asia.
The sale is separate from the pending sale of ING's Asian and Swiss private banking assets, which sources have told Reuters is not likely until next month.
BOJ: economy has 'stopped worsening'
Members of the Bank of Japan's policy board agreed last month that economic conditions in Japan and overseas had stopped worsening, with the Chinese economy growing at a faster rate, according to minutes of the board's August 10-11 meeting released Friday.
Overseas economic conditions were likely to "recover gradually against the background of further progress in inventory adjustments and the positive effects of fiscal and monetary policy measures," members said, according to the minutes.
Many members agreed that the state of the global financial markets had been improving since early spring of this year.
But some members said the pace of sustainability of overseas economic recovery -- after inventory adjustments had been made and the initial effects of the policy measures had abated -- remained "highly uncertain."
In Japan, the economy was likely to start recovering with "medium- to long-term expectations of future growth generally unchanged" for the latter half of fiscal 2009 onward, members said.
Still, economic activity would be greatly influenced by developments in final demand, so members warned that the outlook included a "significant level of uncertainty."
At the meeting in August, the Bank of Japan unanimously voted to leave its unsecured overnight call loan rate unchanged at 0.1%, as had been widely expected, and left its overall, cautiously-optimistic economic assessment unchanged. See story on Aug. 11 BOJ meeting.
Looking ahead, the policy board said the bank would encourage the uncollateralized overnight call rate to remain at around 0.1% for the immediate future, according to the minutes of the August meeting.
At the most recent policy meeting in September, the board had also unanimously voted to hold its key unsecured overnight call loan rate unchanged at 0.1%, and it slightly upgraded its economic view for the first time since July.
Obama Arrives at G20; Anarchists Protest Summit
U.S. President Barack Obama arrived at the Group of 20 summit in Pittsburgh Thursday with an ambitious agenda to crack down on banks' risky behavior and rebuild the global economy on a more stable footing.
The White House said regulatory reform remained the top priority, dismissing concerns by German Chancellor Angela Merkel who warned that a U.S. drive to rebalance the global economy risked distracting the G20 from a more urgent need for market regulation.
"I don't think they're in any way mutually exclusive," White House Spokesman Robert Gibbs said.
The sheer volume of problems the two-day summit is set to address — from the lopsided global growth model to tougher rules for banks and bankers' pay, plus climate change — prompted low expectations for any near-term action.
But there was broad consensus that tougher, coordinated regulation was needed to avoid a repeat of the two-year crisis that cost millions of people their jobs and forced governments to put up trillions of dollars in taxpayer money to prop up a faltering financial system.
"We do know that unless we all have greater rules for the road, money can fly and transfer anywhere," Gibbs said. "So if there are weaker rules in one place but everyone else is taking concerted efforts, you don't have a defense against what happened happening again."
Aides were still grappling over the precise wording for a statement to be issued at the summit's conclusion Friday detailing the G20's commitments.
A G20 source told Reuters a draft version of the statement did not include a firm cap on bankers' bonuses, something France had pushed for early on before backing down amid objections primarily from the United States and Britain.
The G20 source said the draft document contained no figures on funding to fight climate change, another source of tension as some European leaders complain about slow progress.
The one sign of progress in climate change discussions was on phasing out subsidies for fossil fuels. The G20 source said the draft statement mentioned phasing them out in the "mid-term" but included no precise dates.
G20 Turns Violent
Police threw canisters of pepper spray and smoke at anarchists protesting the G20 Summit after the marchers responded to calls to disperse by rolling trash bins and throwing rocks.
The march turned chaotic at just about the same time that President Barack Obama and first lady Michelle arrived.
The clashes began after several hundred protesters, many advocating against capitalism, tried to march from an outlying neighborhood toward the convention center where the summit is being held.
Police in riot gear stood guard near the protesters, who banged on drums and chanted "Ain't no power like the power of the people, 'cause the power of the people don't stop."
The marchers did not have a permit and, after a few blocks, police declared it an unlawful assembly. They played an announcement over a loudspeaker telling people to leave or face arrest and then moved in to break it up.
Protesters split into smaller groups. Some rolled trash bins toward police, and a man in a black hooded sweat shirt threw rocks at a police car, breaking the front windshield. Some protesters used pallets and corrugated steel to block a road. Police said the windows at one bank branch were broken.
Officers fired pepper spray and smoke at the protesters. Some of those exposed to the pepper spray were coughing, complaining of eyes watering and stinging.
Will a $10 Hamster Have Them Fighting in the Aisles?
Maybe it's a sign of the times when one of the toys predicted to be among the top sellers this Christmas Holiday is a $10 Zhu Zhu pet hamster.
Toys 'R Us has issued its 2009 Holiday Hot Toy list. The list includes 36 total items, but the fuzzy hamster is one of the "Fabulous 15," which is considered to be the best of the best on the retailer's list.
The retailer puts a lot of effort into selecting these toys, which will be featured promiently at its stores and promotions. This year, the company has put an extra focus on selecting toys that offer parents good value.
Take the priciest item on the list. It's a Disney Netpal, a Disney-branded netbook computer, that sells for about $350. That item, while pricey, may be a more affordable option for parents, who might have purchased a new computer for their child in more prosperous times.
The list includes many brands that are familiar: Hasbro's [HAS 27.31 -0.57 (-2.04%) ] Transformers action figures, Nintendo's [NTDOY 33.11 0.33 (+1.01%) ] Wii video games, and a Star Wars Lego set. (To see all of the "Fabulous Fifteen", plus other selected toys from the hot list, click here.)
Toys 'R' Us also is expecting radio-controlled vehicles to sell well, and has added an all-terrain vehicle from its own store brand to its list. That toy sells for $120.
As for the holiday season, already forecasts are not looking too inspiring. The best one can say is that retail analysts suspect there is no where for the industry to go but up from last year.
On Tuesday, consultant and market researcher Retail Forward said this holiday season will be the second-worst in 42 years, with sales growth expected to be flat compared with last year's 4.5 percent decline.
For toymakers, the holiday season is an even more critical time as that is when it makes the bulk of its sales.
So will the hamsters have parents fighting in the aisles?
Fed May Need Aggression to Reverse Moves, Warsh Says
Federal Reserve Governor Kevin Warsh said the U.S. central bank may need to be as aggressive in reversing its actions to revive the economy and financial markets as policy makers were in starting them.
"If 'whatever it takes' was appropriate to arrest the panic, the refrain might turn out to be equally necessary at a stage during the recovery to ensure the Federal Reserve's institutional credibility," Warsh said in an opinion piece posted late today on the Wall Street Journal's Web site.
The message from Warsh, 39, one of Chairman Ben S. Bernanke's top advisers during the financial crisis, stresses that the Fed may start to raise interest rates before it's obvious that it is necessary. Just yesterday, the Fed unanimously decided to keep its benchmark rate near zero and repeat that rates will stay low for an "extended period."
"Market participants and policy makers alike should steer clear of ironclad policy prescriptions," Warsh said. "Nonetheless, I would hazard the view that prudent risk management indicates that policy likely will need to begin normalization before it is obvious that it is necessary, possibly with greater force than is customary, and taking proper account of the policies being instituted by other authorities."
The Fed has already begun cutting back some of its emergency aid to financial firms as part of its so-called exit strategy from a $1 trillion credit expansion.
FOMC Decision
Earlier today the central bank said it will further shrink auctions of cash loans to banks and Treasury securities to bond dealers, reducing the combined initiatives to $100 billion by January from $450 billion. The Fed cited "continued improvements" in financial markets.
Warsh is scheduled to speak to a Chicago Fed-hosted banking conference tomorrow, where he will deliver a similar message.
A former Morgan Stanley investment banker appointed to the Fed in 2006 by then-President George W. Bush, Warsh helped Bernanke and the Treasury navigate the financial crisis, including developing terms of the government's purchases of bank stakes and mediating a takeover fight over Wachovia Corp.
"Judgments made by policy makers in the current period are likely to be as consequential as any made in the depths of the panic," Warsh said in the Journal. "That means policy makers should continue to communicate as clearly as possible the guideposts, conditions and means by which extraordinary monetary accommodation will be unwound, including the removal of excess bank reserves."
INVESTMENT VIEW
City Union Bank Makes A Pitch For The Big League
City Union Bank Makes A Pitch For The Big League
BSE 532210; CMP Rs 28.45
City Union Bank Ltd, one of the oldest private sector banks in the country is trying a home run. Even though with an EPS of Rs 4, and Annual Profits for FY09 of Rs 120 crore it is no minnow, but when compared to its market cap of Rs 864 crore, the Bank now proposes to raise as much Rs 500-600 crore through an issue of Rights in the ratio of 1:4 and a QIP of Rs 300 crore. The Bank already enjoys a CAR of 23 per cent, the highest in the country with GNPAs of 1.9 per cent-the lowest in the country. And yet the stock fetches a PE of 6 based on forecast FY10 earnings and just 1.12 times forecast Book Value for March 2010. As compared to this, most private sector banks in the country fetch PEs of 20 plus and Price to Book of as high as 3 times. Thus, very conservatively the City Union stock should quote atleast at Rs 50-60 in a year's time from now and long term investors need to take interest in this stock.
This is the text of the announcement made by City Union to the BSE:
1. To issue 8,00,00,000 equity shares of Rs 1/- each on Rights basis at a suitable premium in the ratio of one equity share for every four shares held by the shareholders of the bank as on the record date to be decided by the Board, after complying with the applicable laws and regulations including RBI & SEBI Guidelines.
2. To issue equity shares by way of Qualified Institutional Placement (QIP) route up to Rs 300 Crs in accordance with the SEBI Guidelines and subject to necessary approvals.
(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
--
Arvind Parekh
+ 91 98432 32381
