NIFTY FUTURES LEVELS
RESISTANCE
4774
4795
4843
4866
4936
SUPPORT
4761
4729
4657
4588
4565
4495
RESISTANCE
4774
4795
4843
4866
4936
SUPPORT
4761
4729
4657
4588
4565
4495
INTRADAY calls for 6th Nov 2009
Buy BEL-1616 for 1676-1690+ with sl 1590
Buy PTC-114 for 119-123+ with sl 112
Buy BEL-1616 for 1676-1690+ with sl 1590
Buy PTC-114 for 119-123+ with sl 112
Buy Patni-493 for 529-537 with sl 485
Buy Unitech-85 for 92-96 with sl 82
Buy Unitech-85 for 92-96 with sl 82
Positional
Buy LUPIN-1319 for 1422+ with sl 1300
Buy Wockpharma-196 for 242+ with sl 186
Buy LUPIN-1319 for 1422+ with sl 1300
Buy Wockpharma-196 for 242+ with sl 186
stocks that are in news today:
-121.4 crore IOC bonus shares to hit market today
-TRAI mulls fixing SMS termination charges – BS
-M&M to launch new motorcycle next year – BS
-Honda Motor to debut 110 cc mobike this fiscal – BL
-Patni promoters to take call on stake sale by January – BS
-Nalco hunts for Uranium mines in Namibia – DNA
-PNB to cut deposit rates on some tenures by up to 50 bps from November 9
-Bank Of Rajasthan cuts home loan rates to 7.50%
-MphasiS board meet on November 24 on merger of 100% subsidiary MphasiS FinSolutions with itself
-Kajaria Ceramics inks fuel supply pact with Gail, to save Rs 15 crore annually
-Intel in talks with ITI for WiMax JV; ITI minority shareholder with 26% stake - BS
-Ex-dividend: HUL @ Rs 3
-Bio Whitegold to resume trading,
-121.4 crore IOC bonus shares to hit market today
-TRAI mulls fixing SMS termination charges – BS
-M&M to launch new motorcycle next year – BS
-Honda Motor to debut 110 cc mobike this fiscal – BL
-Patni promoters to take call on stake sale by January – BS
-Nalco hunts for Uranium mines in Namibia – DNA
-PNB to cut deposit rates on some tenures by up to 50 bps from November 9
-Bank Of Rajasthan cuts home loan rates to 7.50%
-MphasiS board meet on November 24 on merger of 100% subsidiary MphasiS FinSolutions with itself
-Kajaria Ceramics inks fuel supply pact with Gail, to save Rs 15 crore annually
-Intel in talks with ITI for WiMax JV; ITI minority shareholder with 26% stake - BS
-Ex-dividend: HUL @ Rs 3
-Bio Whitegold to resume trading,
BIAL - Exclusive:
-GVK to get 1 board seat on BIAL: Sources
-L&T had put 17% stake on block on October 20: Sources
-RoFR for L&T stake to end on November 20: Sources
-Alert: RoFR is right of first refusal
-GVK to look at L&T's BIAL stake post RoFR ends: Sources
-Zurich Airport to manage BIAL till May 2015: Sources
-BIAL has 515 acres of land around airport for commercial development
-GVK to get 1 board seat on BIAL: Sources
-L&T had put 17% stake on block on October 20: Sources
-RoFR for L&T stake to end on November 20: Sources
-Alert: RoFR is right of first refusal
-GVK to look at L&T's BIAL stake post RoFR ends: Sources
-Zurich Airport to manage BIAL till May 2015: Sources
-BIAL has 515 acres of land around airport for commercial development
Strong & Weak futures
This is list of 10 strong futures:
This is list of 10 strong futures:
PTC, Ashok Ley, Patni, Dr Reddy, McDowell-N, Lupin, BEL, Asian Paint, Yes Bank & Crompton Greaves.
And this is list of 10 Weak futures:
RCom, Suzlon, Purva, EKC, GMR Infra, Tata Comm, MLL, ICSA, Punj Lloyd & Aban Off shore.
Nifty is in Down trend
Nifty is in Down trend
NIFTY FUTURES (F & O):
Above 4772-4774 zone, rally may continue up to 4795 level and thereafter expect a jump up to 4841-4843 zone by non-stop.
Above 4772-4774 zone, rally may continue up to 4795 level and thereafter expect a jump up to 4841-4843 zone by non-stop.
Support at 4729 & 4761 levels. Below these levels, expect profit booking up to 4657-4659 zone and thereafter slide may continue up to 4588-4590 zone by non-stop.
Buy if touches 4565-4567 zone. Stop Loss at 4495-4497 zone.
On Positive Side, cross above 4864-4866 zone can take it up to 4934-4936 zone by non-stop. If crosses & sustains this zone then uptrend may continue.
Short-Term Investors:
1 Week: Bullish with a SL of 4671.20. Target at 4918.10.
1 Month: Bullish with a SL of 4620.00. Target at 6289.00.
3 Months: Bearish with a SL of 5080.00. Target at 2951.00.
1 Year: Bullish with a SL of 2575.00. Target at 6201.65.
BSE SENSEX:
Buy with a SL of 15957.06. Target at 16583.56.
BSE SENSEX:
Buy with a SL of 15957.06. Target at 16583.56.
Short-Term Investors:
1 Week: Bullish with a SL of 15720.73. Target at 16606.95.
1 Month: Bullish with a SL of 14937.03. Target at 18381.96.
3 Months: Bearish with a SL of 17361.47. Target at 12425.52.
1 Year: Bullish with a SL of 15197.60. Target at 18289.88.
INVESTMENT BUY:
Buy VELAN HOTELS (BSE Cash & BSE Code: 526755)
Buy with a Stop Loss of 19.32. Above 25.64, it will zoom.
Buy VELAN HOTELS (BSE Cash & BSE Code: 526755)
Buy with a Stop Loss of 19.32. Above 25.64, it will zoom.
Today: May hold on gains.
1 Week: Bullish, as per current market conditions.
1 Month: Bullish, as per current market conditions.
3 Months: Bearish, surprisingly going up.
1 Year: Bullish, as per current market conditions.
Buy PSM SPINNING (BSE Cash & BSE Code: 503873)
Buy with a Stop Loss of 10.55. Above 13.49, it will zoom.
Today: May hold on gains.
1 Week: Bearish, surprisingly going up.
1 Month: Bearish, surprisingly going up.
3 Months: Bullish, as per current market conditions.
1 Year: Bullish, as per current market conditions.
FUNDS DATA
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 05-Nov-2009 | 2015.84 | 1888.9 | 126.94 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 05-Nov-2009 | 1337.04 | 1137.54 | 199.5 |
SPOT LEVELS
 | 4765.55 | ( 1.16 %) | 54.75 |  |
| 1 | 2 | 3 | ||
| Resistance | 4824.40 | 4883.25 | 4990.15 | |
| Support | 4658.65 | 4551.75 | 4492.90 | |
 | 16063.90 | ( 0.95 %) | 151.77 | | |
| 1 | 2 | 3 | |||
| Resistance | 16249.22 | 16434.55 | 16776.71 | ||
| Support | 15721.73 | 15379.57 | 15194.24 | ||
Interesting findings on web:
Stocks rallied Thursday, with the Dow industrials topping 10,000, after the government reported a bigger-than-expected drop in jobless claims, and a number of retailers reported improved October sales.
Stocks rallied Thursday, with the Dow industrials topping 10,000, after the government reported a bigger-than-expected drop in jobless claims, and a number of retailers reported improved October sales.
U.S. stocks jumped on Thursday, pushing the S&P 500 up for a fourth day, as economic data boosted confidence in the recovery and strong results from Cisco Systems (CSCO.O) suggested a rebound in technology spending.
The market's advance was broad-based, and the Dow ended above 10,000 for the first time in two weeks.
The Dow Jones industrial average .DJI jumped 203.82 points, or 2.08 percent, to end at 10,005.96. The Standard & Poor's 500 Index .SPX gained 20.13 points, or 1.92 percent, to 1,066.63. The Nasdaq Composite Index .IXIC rose 49.80 points, or 2.42 percent, to close at 2,105.32.
RUSSELL581.1518.03+3.2%
TRAN3811.2978.25+2.1%
UTIL370.045.72+1.57%
S&P 100494.638.80+1.81%
S&P 400682.3715.65+2.35%
NYSE6950.14119.71+1.75%
NAS 1001721.0940.42+2.4%
Both the Dow and Nasdaq saw the biggest one-day percentage gains since July 23.
"Today's big news was that we saw fewer claims for unemployment benefits," said Mike Stanfield, chief investment officer at VSR Financial Services. "That suggests that the underlying economics are continuing to improve."
He said that this was reassuring to investors following several weeks of concerns about the pace of the recovery. It was also encouraging for investors ahead of Friday's monthly employment report.
The issue for markets is whether there have been enough positive developments of late to give stocks another leg up, Stanfield said. He said he thinks that the next leg up could be delayed, and that stocks are likely to churn in a range for the next six months or so. After that point, investors will have a better sense of how the economy is doing without the benefit of trillions of dollars in government stimulus, which many credit for the 3.5% rise in GDP in the third quarter.
The government's weekly jobless claims report and third-quarter productivity report showed that the pace of layoffs is slowing, but also that employers are still not creating jobs.
The number of Americans filing new claims for unemployment fell to 512,000 last week from 532,000 the previous week, the lowest level since January. Economists surveyed by Briefing.com expected 522,000 claims, on average.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 5.749 million from 5.817 million the week before. Economists thought it would fall to 5.750 million. It was the eighth decline in nine weeks. Although the decline could mean people are running out of benefits -- not that they are finding jobs.
The claims report boosted investor sentiment, and created "some anticipation that maybe tomorrow's employment report may be better than expected," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
Separately, the Senate and House both voted Wednesday to extend unemployment benefits by up to 20 weeks -- and extend the homebuyer tax credit. President Obama is expected to sign the bill into law Friday.
Another economic report showed that worker productivity is up, a good sign for corporate profits, but also further evidence that companies aren't hiring. Third-quarter productivity rose by 9.5% after rising 6.6% in the previous quarter. Economists thought it would fall to 6.5%.
"The productivity and jobless claims show a rapidly improving economy," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
"We've actually seen more good news than bad across a broad spectrum of economic data," said Art Hogan, the chief market analyst at New York-based Jefferies & Co. "We look at the initial jobless claims as another piece of economic data we're pretty happy with."
But the key report this week is the October unemployment report from the Labor Department, due Friday, Detrick said.
"The steady decline in initial claims is convincing evidence that the pace of firing is tapering off," Zach Pandl, analyst at Nomura Securities International, said in a note to clients. "Overall these data offer more evidence that US labor market conditions are gradually improving."
The U.S. government is scheduled to release its key monthly jobs report Friday morning, with economists polled by Reuters forecasting a loss of 175,000 jobs in October, sharply below the 263,000 jobs cut in the previous month. But the U.S. unemployment rate is forecast to rise to 9.9 percent in October from September's rate of 9.8 percent, which was a 26-year high.
Shoppers remained cautious with their spending last month, with discounters and warehouse clubs seeing the best October retail sales.
The Bank of England and European Central Bank both held their interest rates steady, as expected. There had been some buzz that the ECB was considering raising European rates. Only Australia and Norway have so far raised rates. Iceland actually cut rates.
A report out from Freddie Mac today showed 30-year fixed mortgage rates fell below 5 percent again: The 30-year averaged 4.98 percent last week.
Automaker Toyota (TM) reported a surprise quarterly profit Thursday and cut its annual loss forecast by over 50%.
Shares of CVS Caremark (CVS, Fortune 500) slumped 21% in active trading after the company warned that 2010 profits at Caremark, its pharmacy benefits management division, are likely to slump by 10% to 12%. The company also said Caremark's CEO is stepping down. Drugstore CVS bought Caremark in March 2007.
Satellite television provider DirecTV Group's third-quarter profit rose 0.8% as higher revenue outpaced higher costs, sending shares up 1.70, or 6.3%, to 28.54.
Sara Lee increased 42 cents, or 3.7%, to 11.82. Its fiscal first-quarter earnings rose 23.5% on lower costs as results exceeded analysts' expectations for the packaged-food giant.
Among the positive quarterly reports, CenturyTel increased 1.09, or 3.3%, to 34.27. The company's third-quarter profit more than tripled, beating analysts' estimates, as results were beefed up by the company's acquisition of fellow telecommunications provider Embarq.
Prudential Financial swung to a third-quarter profit as the insurer benefited from a rebound in stock and credit markets. The company also boosted its 2009 earnings forecast, but closed down 1.92, or 4.1%, at 44.64, with some analysts calling the guidance tepid and cautioning against using the fourth-quarter view as a run rate for 2010.
Agrium said it is taking one more run at acquiring fellow fertilizer firm CF Industries Holdings, boosting the cash component of its offer by $5 a share and raising its bid for CF to a value of $93 a share. The news pushed Agrium up 1.82, or 3.8%, to 49.81, while CF slid 6.49, or 7.5%, to 79.90.
The news overshadowed the company's bigger-than-expected jump in quarterly profit.
Gains were broad based, with all 30 Dow issues rising, led by Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), IBM (IBM, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Procter & Gamble (PG, Fortune 500), 3M (MMM, Fortune 500), United Technologies (UTX, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).
During the regular session, tech stocks climbed across the board, with the NYSE Arca Network index up 2.1 percent, while the PHLX Semiconductor index .SOXX advanced 2.6 percent.
On the upside, Costco (COST, Fortune 500) said sales at stores open a year or more rose 5% during the month, topping forecasts for a rise of 4.7%. Shares gained around 1%.
Gap (GPS, Fortune 500) reported sales rose a better-than-expected 4%, sending shares higher in morning trading. Shares gained 3.5%.
On the downside, American Eagle Outfitters (AEO) said sales fell 5% versus forecasts for a rise of 1.7%. Shares fell 11.6% in active New York Stock Exchange trading.
Cisco, the biggest maker of networking equipment, added 2.8 percent to $23.93. The company's net income fell 19 percent to $1.79 billion, or 30 cents a share, in the first quarter, which ended Oct. 24. Excluding stock compensation and some other costs, profit was 36 cents, beating the 31-cent average estimate in a survey of analysts.
Cisco Chairman and Chief Executive Officer John Chambers, one of the first technology leaders to herald the recession two years ago, said he now sees a global economic recovery, fueling a rebound in his company's sales this quarter.
"Cisco is talking about a recovery around the world, Chambers is being very optimistic and people listen to him," said William Dwyer, chief investment officer at Baltimore-based MTB Investment Advisors, which oversees $13 billion. "People are a little cautious, they like what they're seeing, but there's an awful lot built into the market."
Shares of DuPont (DD.N) rose 3.7 percent to $33.38 after its chief executive outlined plans for growth in 2010 and after.
In deal news, IMS Health Inc (RX.N) agreed to be bought by TPG and CPP Investment board and helped lift the S&P Healthcare index .GSPA 1.6 percent. The deal was valued at $5.2 billion, including the assumption of debt. IMS Health shares surged 23.3 percent to $20.73.
On the downside was CVS Caremark Corp (CVS.N) , which tumbled 20.1 percent to $28.87 after comments from Chief Executive Tom Ryan on weakness in the pharmacy benefit management business.
Banks advanced, with Bank of America [BAC 15.15 0.45 (+3.06%) ] and Citigroup [C 4.05 0.08 (+2.02%) ] both up more than 2 percent, after a study suggested commercial real estate is likely to bottom in 2010.
Homebuilders also rallied, with Beazer and Pulte Homes among the biggest gainers, after the Senate voted to extend the first-time homebuyers' tax credit through April 30. First-time buyers will be eligible for an $8,000 tax credit. The measure was also extended to current homeowners: Anyone who's owned a home for at least five years and decides to move will get a $6,500 tax credit.
Semiconductors also rallied, with Intel [INTC 18.89 0.30 (+1.61%) ] up 1.6 percent, after a report showed chip sales are expected to rise 10 percent next year.
U.S.-traded shares of Toyota [TM 80.62 1.16 (+1.46%) ] gained 1.4 percent after the Japanese automaker unexpectedly posted a profit and cut its full-year loss forecast in half as stimulus programs around the world — both those specific to autos and to economies as a whole — boosted sales.
Hyatt Hotels [H 28.00 3.00 (+12%) ] rose 12 percent in its debut on the New York Stock Exchange. Its IPO of 38 million shares priced last night at $25 a share, within the expected range.
Whole Foods (Nasdaq) dropped 4.96, or 15.5%, to 27.10 as the high-end grocer posted higher fourth-quarter earnings but provided a full-year earnings view that wasn't as bullish as Wall Street's expectations. Also, it expects a holder to convert $425 million in preferred stock, which will balloon shares outstanding by 29.7 million.
Retailers reported their October sales this morning and more than half fell short of expectations. The sector traded mixed: JCPenney and Kohl's fell. Nordstrom and Gap advanced as retail analyst Dana Telsey said she's seeing some signs of a shift to more discretionary spending.
Teen retailers were hit hard: American Eagle and Aeropostale missed their targets by a long shot and Abercrombie said its sales fell a whopping 15 percent.
The S&P retail index .RLX rose 1.8 percent.
After the bell today, we'll get earnings reports from CBS, Nvidia and Starbucks, among others.
VIX25.43-2.29-8.26.
Oil,Gold & Currencies:
U.S. light crude oil for December delivery fell 62 cents to settle at $79.78 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery climbed $2 to settle at $1,089.30 an ounce.
The dollar fell versus the euro and gained against the yen.
The dollar headed for a weekly loss against the euro before a government report today forecast to show U.S. employers cut fewer jobs last month, boosting demand for higher-yielding assets.
Japan's currency was poised for a weekly decline against the euro before data economists said will show German factory orders rose in September for a seventh month. Australia's currency climbed against 15 of its 16 major counterparts after the central bank said the nation's economy will expand at more than three times the pace it had forecast in August.
"Positive economic data will likely encourage investors to buy higher-yielding assets at the expense of the dollar," said Toshiya Yamauchi, a Tokyo-based manager in the foreign-exchange margin trading department at Ueda Harlow Ltd. "The pace of non- farm job losses seems to be slowing. The yen tends to be sold along with the dollar when the economic outlook improves."
The dollar was little changed at $1.4864 per euro at 11:16 a.m. in Tokyo. Yesterday, it touched $1.4917 in New York, the weakest level since Oct. 27. The dollar has dropped 1 percent this week against the euro.
Japan's currency was little changed at 134.72 yen per euro, heading for a 1.6 percent loss this week. The dollar fetched 90.62 yen from 90.71 yen. On the week, the greenback has gained 0.6 percent.
The Labor Department is forecast to report U.S. employers eliminated 175,000 jobs in October after a reduction of 263,000 in the previous month, according to the median estimate of economists in a Bloomberg News survey. The data are due today in Washington. The U.S. unemployment rate probably rose to 9.9 percent last month from 9.8 percent in September, according to a separate Bloomberg News survey.
'Last to Exit'
"The Federal Reserve won't be able to implement exit strategies until the jobless rate improves," said Yoshihiro Nomura, Tokyo-based foreign exchange team manager at Trust & Custody Services Bank Ltd. "They may start raising interest rates near the end of next year. The Fed will be among the last to exit, and dollar weakening will continue for a while."
The Federal Reserve on Nov. 4 repeated its intent to keep rates "exceptionally low" for "an extended period" as long as the inflation outlook is stable and unemployment fails to decline. Policy makers held the target rate for overnight lending between banks in a range of zero to 0.25 percent.
Australia's Outlook
The Australian dollar rose after the Reserve Bank of Australia today said the nation's gross domestic product will rise 1.75 percent this year and 3.25 percent in 2010. In August, the bank forecast gains of 0.5 percent and 2.25 percent respectively.
"Growth in business investment and exports is expected to be strong, underpinned by the ongoing expansion of the resources sector," the central bank said. "The outlook for Australia's terms of trade has also improved, with some increase now expected over the next year or two."
The Australian dollar rose to 91.16 U.S. cents from 91.02 cents. It advanced to 82.73 yen from 82.57 yen.
Governor Glenn Stevens this week became the first central banker to raise borrowing costs twice this year.
Benchmark interest rates are 3.5 percent in Australia, compared with as low as zero in the U.S. and 0.1 percent in Japan. That makes the South Pacific nation's assets attractive to investors seeking higher returns. The risk in such trades is that currency market moves will erase profits.
Bank of England
Germany's Economy Ministry is forecast to report factory orders rose 1 percent in September after gaining 1.4 percent in August, according to the median estimate of economists in a Bloomberg News survey. The data are due today in Berlin.
The pound headed for a second weekly advance against the dollar on speculation a U.K. report will show producer prices rose for a fourth month in October, backing the case for the Bank of England to refrain from lowering interest rates.
The central bank yesterday left its key rate at 0.5 percent and raised the amount of bonds it will buy to 200 billion pounds ($332 billion). It was less than the median forecast of 225 billion pounds in a Bloomberg News survey of economists.
There are "a number of indicators of spending and confidence" that "suggest that a pickup in economic activity may soon be evident," the BOE's Monetary Policy Committee said in a statement. "The committee believes that the prospect is for a slow recovery in the level of economic activity."
The price of goods at U.K. factory gates rose 0.2 percent in October after a 0.5 percent increase in September, a separate Bloomberg survey showed before the Office for National Statistics releases the data at in London today.
"The BOE is sounding a little more upbeat on economic prospects and has increased its quantitative easing program by less than expected," said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. "As a result, the pound is finding strength."
The pound traded at $1.6577 from $1.6583 in New York yesterday, when it climbed to $1.6636, the highest level since Oct. 23. It's gained 0.8 percent on the week.
Bonds:
Treasury prices fell, raising the yield on the 10-year note to 3.53% from 3.52% Wednesday. Treasury prices and yields move in opposite directions.
What to expect:
FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks
Other Headlines:
RBA Says Australia Growth to Beat Forecasts, Rates to Rise; Currency Gains
Ex-Galleon Office Worker, 13 Others Charged as U.S. Broadens Insider Case
Berkshire's NetJets to Fire 495 Pilots Amid Slowdown in Corporate Flights
World's Central Banks Signal End to `Largesse' as Depression Threat Fades
Tyranny of Distance Curbs Australian Hedge Fund Revival in Post-Madoff Era
DBS Group's Third-Quarter Profit Climbs 49%, Beating Analysts' Estimates
Twelve Dead, 31 Wounded in Shooting at Army Base in Texas; Gunman Killed
Global-Warming Treaty May Face Full Year's Delay as Nations `Play Games'
Fannie Mae asks for $15 billion in additional funding. Shares fall nearly 10% in late trading as lender asks for funding by Dec. 31
Starbucks Profit Beats Forecasts; Shares Higher
Iran tested advanced nuclear warhead: report
Health reform gets boost before close vote
Abbas offers to quit over stalled peace process
IAEA found nothing serious at Iran site: ElBaradei
U.N. pulls out foreign staff from Afghanistan
U.N. assembly votes for probes of Gaza war charges
Israel complains to U.N. over alleged Hezbollah arms
Bridgestone Falls After Forecasting Loss on Australia, New Zealand Plants
Record Afghan Wheat Crop Shows Displacement of Opium Poppies, U.S. Says
Saudi Arabia Says Planes Attack Yemeni Rebels Holding Territory on Border
Unemployment May Crack 10%, Job Losses to Bottom
Unemployment could crack 10 percent, but job losses should start to show signs of bottoming.
Markets have been hanging on the October employment report, expected to show a drop of 175,000 nonfarm payrolls when it is released at 8:30 a.m. Friday.
"Our number is -140,000, which is a little stronger than consensus," said J.P. Morgan economist Bob Mellman. Mellman said he expects to see an unemployment rate of 10 percent, a bit higher than the street's expectation of 9.9 percent.
"We have a peak of unemployment at 10.2 percent. I don't think we're quite there yet. We have to get where we have rising job growth of about 100,000 a month before the unemployment rate levels off, and we think that would be in the the first quarter," he said.
Stocks ran up ahead of the much anticipated Friday number, driving the Dow above 10,000 once again. The rally was fanned by better economic data and Cisco's strong earnings report. Non farm productivity surged to a 9.5 percent annual rate, and new weekly jobless claims were at 512,000, a 10-month low.
"They kind of floated it up on air," said Art Cashin, director of floor operations at UBS, of the stock market. "There were buy programs and nobody to stand in their way, and that's how you turned it up." Traders have been expecting volatility this week, but several said they were surprised the market moved higher Thursday.
The Dow jumped 2 percent, or 203 points to 10,005, while the S&P 500 rose 1.9 percent to 1066. At the same time, the dollar was mixed, as the dollar index rose but the greenback lost more ground against the euro. Commodities turned in a mixed performance.
"Equities guys are betting it (the jobs number) surprises to the upside, rather than the downside," said Boris Schlossberg of GFT Forex.
"If that's the case, the big numbers across the big global risk trade have been 1,100 on the S&P 500, 10,000 on the Dow, and $1.50 euro dollar. If we get the positive story, then all of those numbers get retested again," he said.
Besides the jobs report, wholesale trade is released at 10 a.m. and consumer credit is reported at 3 p.m. AIG reports earnings ahead of the bell, and Berkshire Hathaway reports after the close. Starbucks late Thursday reported better than expected profits of $150 million, and its shares were moving higher.
Jobs, Jobs, Jobs
The jobs report has been a major focus for traders this week. The employment situation remains the most worrisome aspect of the recovery, and economists do not see the unemployment rate bouncing back any time soon. A headline number of 10 percent could spook the market, even though it is an expected outcome, they say.
Mesirow Financial Chief Economist Diane Swonk expects to see job losses of 200,000 and an unemployment rate of 9.9 percent. "Whether it is 9.9 percent, 9.8 or even 10, it's just noise at this point in time... My concern is the longer people are unemployed, the lower their chances of getting re-employed," she said.
Swonk believes the jobs recovery will be slow, and that unemployment will not return to a level of 6 percent until the end of 2013. "I hope I'm wrong," she said.
"The good news is the pace is abating and we are yet to see the turning point on hiring. I think we will see that before the end o f the year, but it will be muted," she said.
Swonk said the credit constraints on small business are a concern because that segment of the economy is responsible for 60 percent of employment.
Deutsche Bank chief U.S. economist Joseph LaVorgna said he expects Friday's numbers to show a decline of 175,000 in non farm payrolls. "The numbers will look pretty lousy," he said. But he is more upbeat on rehiring.
"The key thing is you've got massive productivity gains, which are unsustainable because companies have over cut their payrolls. So if you have an incremental increase in demand and improvement in the economy, that will give way, in our opinion, to some serious hiring," he said.
Swonk said one area that might show new signs of job losses is health care, which has been pretty much insulated so far. "We know the pressure on health care is pretty intense because people are shedding their health care as their overtime goes away. They're trying to preserve their disposable income by cutting back on insurance coverage," she said.
Asia:
Asian stocks rose, paring a weekly loss, after Australia's central bank more than tripled its economic growth forecast and reports showed U.S. unemployment claims and worker productivity beat estimates.
Macquarie Group Ltd., Australia's largest investment bank, and Westpac Banking Corp., the country's second-largest bank, both gained more than 2.5 percent. James Hardie Industries NV, the top seller of home siding in the U.S., advanced 2.1 percent. Asahi Glass Co., Asia's largest glassmaker, climbed 7.8 percent in Tokyo after forecasting a narrower loss. Pioneer Corp. surged 8 percent after the maker of car-navigation systems said it needs less funds than previously expected as earnings improve.
"Unemployment is the biggest problem in the U.S. right now and we're seeing some positive signs there," Kiyoshi Ishigane, a strategist in Tokyo at Mitsubishi UFJ Asset Management Co., which oversees about $56 billion.
The MSCI Asia Pacific Index gained 1 percent to 115.82 as of 11:09 a.m. in Tokyo, with more than twice as many stocks advancing as declining. The gauge has fallen 0.5 percent this week. It has climbed 29 percent this year, its steepest increase since 2003, as governments around the world pumped money into the financial system to revive the economy.
Japan's Nikkei 225 Stock Average advanced 1.1 percent to 9,827.88. Australia's S&P/ASX 200 Index climbed 1.5 percent. The Hang Seng Index climbed 2 percent in Hong Kong. All Asian benchmarks open for trading advanced, except in the Philippines.
U.S. Stocks Surge
In the U.S. yesterday, the Dow Jones Industrial Average surged by 2.1 percent, the most since July. Data from the Labor Department showed initial joblessness claims dropped to 512,000 last week, the lowest since January, and worker productivity climbed at a 9.5 percent annual rate in the third quarter, the fastest pace in six years. Labor costs also fell, signaling companies may start hiring again. Futures on the Standard & Poor's 500 Index were little changed today.
James Hardie gained 2.1 percent to A$7.15. Sony Corp., Japan's biggest exporter of televisions, climbed 2.9 percent to 2,625 yen. Canon Inc., the world's largest camera maker, advanced 3.6 percent to 3,470 yen.
Macquarie Group climbed 3 percent to A$49.07. Westpac gained 2.6 percent to A$26.56 and Melbourne-based BHP Billiton Ltd., the world's largest mining company, added 1.4 percent to A$36.95. Westpac and BHP were the biggest contributors to the MSCI index.
Australia's central bank said the economy will expand at more than three times the pace forecast in August, and signaled it will continue to lead the world in raising interest rates.
Australian GDP
"A further gradual lessening of monetary stimulus is likely to be required over time," the Reserve Bank said in Sydney today. Gross domestic product will rise 1.75 percent this year and 3.25 percent in 2010, the bank said. Three months ago, it forecast gains of 0.5 percent and 2.25 percent respectively.
Stocks in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the Standard & Poor's 500 in the U.S. and 15 times for the Dow Jones Stoxx 600 Index in Europe.
Asahi Glass jumped 7.8 percent to 825 yen. The company said it will book a net loss of 5 billion yen ($55 million) this year, narrower than its previous forecast of 34 billion yen.
Pioneer surged 8 percent to 244 yen. The company said it will raise only half of the 40 billion yen it had targeted to raise by March 2012. Separately, the company said its first-half net loss shrank 7.3 percent to 40.9 billion yen, in line with preliminary estimates disclosed last week.
Nikkei 225 9,827.88 +110.44 ( +1.14%). (08.42 AM IST)
HSI 21885.8 +406.72 +1.89%. (08.42 AM IST)
SSE Composite 3155.05 3169.05 3180.94 3158.39 + 0.44. (08.43 AM IST)
Rupee:
The partially convertible rupee INR=IN ended at 47.0150/0250 per dollar on Thursday, above Wednesday's close of 47.05/06.
INDIA:
India's stocks rose for a second day after the nation's tax collection increased, raising optimism the economy is recovering. Bharti Airtel Ltd. gained on reports that fees may be lowered.
Maruti Suzuki India Ltd., the maker of half the cars sold in India, advanced to the highest in almost two weeks after the government said personal income tax increased 2.9 percent. Bharti Airtel, the biggest mobile-phone service operator, jumped the most in more than two months after the Economic Times reported that the government may reduce annual license fees.
The 30-share BSE index .BSESN closed up 0.95 percent, or 151.77 points, at 16,063.90, after falling as much as 2.2 percent earlier in the day. Twenty-three of its components gained. The sentiment was also helped after data from the finance ministry showed April-October direct tax receipts rose 3.9 percent from a year earlier to 1.73 trillion rupees ($36.8 billion).
The markets recovered towards close following the possibility of lower taxes and listing of public sector firms. The Sensex ended above the 16k mark at 16,063, up 151 points, and the Nifty shut at 4765, higher by 55 points.
The Union Cabinet gave its nod to the divestment of state-run companies making profits in the past three years, with P Chidambaram pointing out that such firms should have 10% of their shares listed on the stock exchanges.
And the finance minister hinted that the government was working towards a lower tax regime through the new tax code.
It was a volatile day of trade. The markets opened in the red following weak Asian cues. There were innumerable attempts at a recovery, only to be followed by fresh weakness.
Buying in telecom, metal, realty, power, auto, oil & gas exploration, select banking and capital goods stocks helped the markets to recover. However, selling in individual stocks like SBI, ITC, Infosys, NTPC, Ambuja Cements and ACC limited the gains to some extent.
Metals, realty and power sectors powered the markets ahead, gaining betwen 2% and 3% each. Reliance Infrastructure rose by 5% at Rs 1,089, Reliance Communications appreciated 5% at Rs 178, Hindalco ended higher by 5% at Rs 125 and Bharti ended up 4% at Rs 319. M&M and Tata Steel ended higher by 3-4%.
Among the losers, SBI shed 1% at Rs 2,138, ITC closed nearly 1% weaker at Rs 252 and ACC lost nearly 1% at Rs 723
The market breadth was strong. Out of 2,745 stocks traded on the BSE, there were 1,829 advances as against 839 declines.
Maruti gained 1.6 percent to 1,485.7 rupees, the highest since Oct. 26. India's direct tax collection in the April- October period rose 3.9 percent to 1.7 trillion rupees ($36 billion) from a year earlier, while taxes from companies climbed 4.6 percent to 1.09 trillion, the Central Board of Direct Taxes said in a statement in New Delhi. Personal income taxes increased to 632 billion rupees.
ICICI Bank Ltd., the nation's second-biggest lender, rose 2 percent to 844.65 rupees, while Mahindra & Mahindra Ltd., the largest maker of sport-utility vehicles and tractors, added 3.6 percent to 960.85 rupees.
Bharti gained 4.5 percent to 319.3 rupees. Reliance Communications, the second-biggest mobile-phone service operator, added 5 percent to 178.2 rupees. India's Communications Minister Andimuthu Raja couldn't be immediately reached for a comment in his office on the report on lower fees.
Both Bharti and Reliance Communications were the worst performers on the Sensex this year.
DLF Ltd., the biggest developer, advanced 2 percent to 372.4 rupees after it said it sees no danger of a housing "bubble," a week after the central bank increased efforts to curb home prices.
Indian stocks may gain as much as 32 percent by the end of next year as a recovery in companies' industrial output and capacity utilization helps boost growth, BNP Paribas said.
Investment Themes
Investment themes for next year will revolve around the acceleration in infrastructure spending along with resilient urban and rural incomes, BNP strategist Manishi Raychaudhuri wrote in a report to clients today. The nation's central bank may choose to exit its accommodative policy by ordering banks to set aside more cash in government bonds instead of increasing borrowing costs in the first quarter of 2010, he said.
Indian stocks entered "attractive territory" after the retreat from this year's high, Nomura Holdings Inc. added.
The following stocks are among the most active in Indian trade. Stock codes are in brackets:
IRB Infrastructure Developers Ltd. (IRB IN), fell 0.6 percent to 243.15 rupees after it was cut to "reduce" from "neutral" at Nomura Holdings, which said the stock's valuations are "rich" given expectations for returns and the company's "constraints" in adding new projects.
Rashtriya Chemicals & Fertilisers Ltd. (RCF IN), India's second-biggest maker by market capitalization of products used to grow crops, climbed 12 percent to 65.8 rupees, the most since May 18. State-controlled Rashtriya Chemicals is negotiating with seven cement companies to provide clearing and forwarding services through its marketing and dealership chain in India, BusinessLine reported today, citing Managing Director U.S. Jha.
In the metal space, Hindalco surged 5%. Tata Steel, Jindal Steel, Sterlite Industries, SAIL and NALCO were up 1-3%.
Auto stocks like Ashok Leyland, M&M, Hero Honda, Maruti Suzuki, Bajaj Auto and Tata Motors moved up 1-4%.
Suzlon Energy was the star today; it surged over 13% on the back of debt restructuring plan. In the power pack, Lanco Infratech, Torrent Power, Reliance Infrastructure, Reliance Power, GMR Infra, NHPC, Power Grid Corp and Tata Power were up 1-7%. However, NTPC declined 0.4%.
Realty stocks like Unitech shot up 3.6%. DLF rose 1.96% and Indiabulls Real was up 1.28%.
In the oil & gas space, Cairn India, ONGC, HPCL, IOC and Reliance Industries gained 1-2%.
ICICI Bank was up 2% in the banking sector. PNB rose 1.54%. Bank of Baroda and HDFC Bank were marginally in the green. However, SBI lost 1.5%.
Airline stocks witnessed buying interest, as sources said Cabinet Secretary would review FDI norm in aviation on November 17. Jet Airways, Kingfisher Airlines and SpiceJet were up 3-8%.
In the technology space, HCL Tech surged 4.40%. Tech Mahindra was up 1.10% and Wipro up 0.42%. However, Infosys lost 0.7%.
HUL gained 0.38% while ITC fell nearly 1% in the FMCG pack.
In the capital goods space, Punj Lloyd and ABB were up 4.7-5.8%. BHEL was up 2.47% and Siemens gained 1.52% while L&T was marginally in the red.
Cement stocks like Ambuja Cements and ACC slipped 3.7% and 1.3%, respectively.
The market breadth also strengthened; about 2,013 shares advanced while 978 shares declined on the BSE. Nearly 773 shares remained unchanged.
In the midcap space, Spice Communication and Wockhardt gained 17-18%. IFCI shot up 13.78%, as government sources said would appoint consultant to decide future shape of the company and might look at merging IFCI with another institution.
Rashtriya Chemical went up 12.17%, as the company is planning to enter cement business.
BF Utilities was up 10%. However, Puravankara Projects, Info Edge, India Cements, Anant Raj Industries and Sobha Developer lost 3-4%.
In the smallcap space, Murli was locked at 20% upper circuit. Hatsun Agro, Selan Exploration, Banco Products and Hexaware Tech moved up 10-13%. However, Prime Securities, Modern India, Entertainment Network Ind, Dhanuka Agritec and Delta Corp fell 3-6%.
Volumes jumped back above the Rs 1 lakh crore mark; total traded turnover was at Rs 1,19,194.34 crore. This included Rs 16,745.39 crore from the NSE cash segment, Rs 96,498.50 crore from the NSE F&O and the balance Rs 5,950.45 crore from the BSE cash segment.
Infosys drops as chairman's wife sells shares for $92 mln
The country's second-largest outsourcer, Infosys Technologies (INFY.BO: Quote, Profile, Research), closed 0.7 percent lower at 2,223.10 rupees after its chairman's wife sold company shares worth $92 million for setting up a venture capital fund. Sudha Murthy, wife Infosys co-founder and chief mentor N.R. Narayana Murthy, sold 2 million shares, or about 22 percent of her total holding.
Patni rises 8.2 pct on report L&T unit eyeing stake
Energy giant Reliance Industries (RELI.BO: Quote, Profile, Research) closed 1 percent higher at 1,939.80 rupees, as the hearing in its gas dispute with Reliance Natural Resources (RENR.BO: Quote, Profile, Research) resumed. One of the judges had withdrawn from the Supreme Court hearing on Wednesday, citing potential conflict of interest.
Engineering and construction firm Larsen & Toubro (LART.BO: Quote, Profile, Research) shed 0.3 percent to 1,542.25 rupees after The Financial Express reported its outsourcing unit was in talks to buy a majority stake in Patni Computer Systems (PTNI.BO: Quote, Profile, Research).
Maytas Infra (MAIL.BO: Quote, Profile, Research) rose by daily limit of 5 percent to 149.45 rupees after it got a contract worth 7.9 billion rupees from IL&FS Transportation Networks to build a part of a four-lane highway in the western state of Maharashtra.
Oil explorer Cairn India (CAIL.BO: Quote, Profile, Research) rose 2.1 percent to 270.55 rupees, after the unit of UK firm Cairn Energy (CNE.L: Quote, Profile, Research) said it had reached a deal to supply crude oil from its field in western India to Reliance Industries.
Coming back to India, among the BSE sectoral indices, the Metal index was the top gainer, adding 3%, followed by the Realty index that was down 2.5% and the BSE Power index was down 2.5%.
The BSE Mid-Cap index gained 2% and the BSE Small-Cap index was up 2%.
Among the 30-components of Sensex, 23 stocks ended in the red and 7 ended in the positive terrain. Reliance Infra, RCom, Hindalco, Bharti and Tata Steel were among the major gainers.
On the other hand, among the major losers were SBI, ITC, ACC, Infosys and TCS.
Outside the frontline indices, the big gainers in the broader market were Spicetele, IFCI, RCF, Hind Copper and Mundra Port. On the other hand, losers included India Cement, Container Corp, Madras Cement and Power Fin.
Shares of Suzlon Energy surged for the first time in 11 days. After sliding over 34% in the past 10 days, shares of Suzlon shot up by over 13% to end at Rs62.5 on the back bargain hunting witnessed at lower levels.
According to a release on the Bombay stock exchange, Suzlon, the constructor of large wind parks has pledged 1.79% equity shares with Indiabulls Financial Services Ltd.
The stock opened at Rs55.5 and made an intra-day high of Rs63 and a low of Rs55. Total traded volumes stood at 20.9mn shares.
The stock hit 52-week high of Rs145.85 on June 5, 2009 and 52-week low of Rs33.05 on March 12, 2009.
Shares of Maytas Infra were locked at 5% upper circuit at Rs149.45 after the company secured the Pune-Sholapur road contract worth Rs7.9bn from IL&FS Transportation Networks Limited (ITNL). ITNL was awarded the work of 4 laning of Pune-Sholapur section of NH-9 from km. 144.40 to km. 249.00 (104.60 kms) in the state of Maharashtra on a DBFOT (Design, Build, Finance, Operate & Transfer) basis by National Highways Authority of India (NHAI). This project is to be completed in a period of 20 month.
Shares of IFCI surged by over 14% to Rs49.95 after media reports stated that the government has hired a consultant to advise it on future of the company. The consultant will advise the government on its role in IFCI.
Reports also stated that IFCI could be merged with another state-owned financial institution.
The stock opened at Rs44 and made an intra-day high of Rs50 and a low of Rs43.5. Total traded volumes stood at 20.4mn shares.
Shares of Aban Offshore erased early losses and ended higher by 4% to Rs1244. The stock slipped sharply from day's high after media reports stated that the company's US$200mn QIP may be delayed as the promoters are not willing to dilute their stake at the current market price.
The company needs to pay US$410mn debt by December 2009. Reports also added that the promoters are also weighing other option to raise fund, would also consider selling rigs.
Gvk Power & Infrastructure announced that the Board of directors approved the acquisition of 40.6mn shares being 12% of paid up equity share capital of Bangalore International Airport Limited (BIAL) at a total cost of Rs.4.84bn from Flughafen Zuerich AG through GVK Airport Developers Pvt. Ltd.
The stock ended lower by 2% to Rs47.25, it opened at Rs48 and made an intra-day high of Rs48.8 and a low of Rs45.4. Total traded volumes stood at 5.4mn shares.
Shares of RCF shot up by over 12% to Rs65.9 after reports stated that the company plans to foray in to cement distribution. The company is aggressively negotiating with seven cement manufacturers to enhance the portfolio of its dealers, the company's Chairman and MD, Mr U. S. Jha was quoted as saying.
RCF posted a net profit of Rs561.2mn for the quarter ended September 30, 2009 as compared to Rs843.7mn for the quarter ended September 30, 2008. Total Income has decreased from Rs26.25bn for the quarter ended September 30, 2008 to Rs18.03bn for the quarter ended September 30, 2009.
The government said that the income tax receipts during April-October 2009 surged 2.9% to Rs. 63,195 crore while the corporate tax receipts during the period grew by 4.6% to Rs. 1,10,000 crore and the direct tax receipts shot up by 3.9% to Rs. 1,73,000 crore.
Besides this, the Union Cabinet gave the approval of listing the state run firms on the stock exchanges, which have a track record of profits in the past three years. Moreover, the government decided that the proceeds from the equity divestment in State run firms can be utilized for capital expenditure on social sector programmes instead of routing it through the National Investment fund. Moreover, the government today announced that there will be no more weekly headline inflation data and it will release the monthly wholesale price index for October 2009 on November 12, 2009.
The BSE Sensex closed higher by 151.77 points or (0.95%) at 16,063.90 and NSE Nifty closed up by 54.75 points or (1.16%) at 4,765.55. The BSE Mid Caps closed higher by 121.04 points at 6,115.44 and the BSE Small Caps closed up by 125.32 points at 7,013.85. The BSE Sensex touched intraday high of 16,092.38 and intraday low of 15,564.89.
Losers from the BSE Sensex pack are SBI (1.14%), ITC (0.90%), ACC (0.78%), Infosys (0.74%), TCS (0.31%) and L&T (0.29%).
Gainers from the BSE Sensex pack are Reliance Infra (5.59%), Reliance Comm (5.34%), Hindalco (5.08%), Bharti Airtel (4.50%), M&M (3.56%), Tata Steel (3.28%), Bhel (2.47%), Hero Honda (2.31%) and JP Associates (2.26%).
BSE REALTY indexwas at 3,884.50 up by 97.68 points or by (2.58%) The main gainers were Housing Dev up by (6.42%) at Rs.341.6, Phoenix Mill up by (6.09%) at Rs.162.9, Orbitco up by (5%) at Rs.254.2, Mahindralife up by (3.62%) at Rs.335, Unitech Ltd up by (3.59%) at Rs.85.15.
BSE METAL index was at 14,218.25 up by 404.93 points or by (2.93%) The main gainers were Jsw Sl up by (7.34%) at Rs.774, Gujara Nre C up by (6.43%) at Rs.58.8, Jindal Saw up by (5.22%) at Rs.729.25, Hindalco In up by (5.08%) at Rs.125.2, Nmdc Ltd up by (4.64%) at Rs.307.65,
BSE BANKEX index was at 9,523.84 up by 85.93 points or by (0.91%) The main gainers were Yes Bank up by (5.53%) at Rs.239.5, Idbi Bank L up by (4.98%) at Rs.117.1, Karnataka Bk up by (4.85%) at Rs.132, Oriental Bk up by (4.68%) at Rs.257.25, Allahabad Bk up by (4.63%) at Rs.123.1.
BSE CG index was at 12,769.35 up by 177.97 points or by (1.41%) The main gainers were Suzlonenergy up by (13.33%) at Rs.62.5, Bharat Elect up by (6.15%) at Rs.1618.25, Punj Lloyd up by (5.78%) at Rs.207.6, Everest Kant up by (4.73%) at Rs.143.9, Abb Ltd up by (4.67%) at Rs.759.05.
BSE POWER index was at 2,932.59 up by 73.11 points or by (2.56%) The main gainers were Suzlonenergy up by (13.33%) at Rs.62.5, Lanco Infra up by (6.93%) at Rs.519.9, Tornt Power up by (5.72%) at Rs.312.15, Rel Infra up by (5.59%) at Rs.1089.3, Abb Ltd up by (4.67%) at Rs.759.05.
BSE IT index was at 4,440.90 down by 3.14 points or by (0.07%) The main losers were Infosys Technologies Ltd.-Ordi down by (0.74%) at Rs.2223.1, Tcs Ltd down by (0.31%) at Rs.623.9.
Wipro Limited closed up by 0.42% at Rs. 598.30. The company has signed an agreement to acquire the Yardley business in Asia, Middle East, Australasia and certain African markets for consideration of approx. $45.5 million, from UK-based Lornamead Group. This transaction adds another jewel to Wipro Consumer Care and Lighting (FMCG arm of Wipro Limited) following its acquisition of Unza in 2007.
Maytas Infra Limited surged 4.99% to close at Rs. 149.45. The company has bagged the Purie-Sholapur road contract worth Rs. 7900 million from IL&FS Transportation Networks Limited (ITN
Govt for 10% public holding in PSUs
Govt may ease FDI limit in aviation
GVK buys 12% stake in B'lore airport
Wipro buys Yardley personal care ops
Gas Opera: Tame start to fresh hearing
DoT may not give in to licence fee cut
Microsoft to cut jobs worldwide
Bank of England holds key rate
PNB slashes interest rates
IHC to set up hotel in B'lore
Govt clears road improvement projects
Barista launches liqueur coffees
Koda's arrest 'imminent', say ED sources
Cos submit proposals to become investor
Exchanges to deal in local languages?
Recovery already underway: Indian CEOs
PM to inaugurate India Economic Summit
Banks to gain from RBI moves: S&P
BOE may expand bond plan
Govt decides to split gas and oil block
Jamshedpur tops per capita C-emission
Vedanta H1 down, no need for fraud probe provisions
Wall Street bonuses seen up 40 pct in 2009 - WSJ
BRIEF - Seven people in custody in ongoing insider trading case - CNBC
U.S. productivity at 6-yr high, jobless claims fall
Infosys chairman's wife sells shares worth $92 mln
Asia central banks wary of rushing into gold
Toyota in surprise Q2 profit, outlook bumpy
Govt pushes stake sales, tax reforms to cut deficit
India's Sensex May Drop 10% on Profit Shortfall, Principal Says
India's stock market may fall by as much as 10 percent within six months as company earnings fail to meet expectations, according to Pankaj Tibrewal, manager of the country's best performing equity fund this year.
"The stock prices have run up; fundamentals now need to catch up," Tibrewal said in an interview yesterday. "If that doesn't happen, you could see real disappointment."
India's benchmark stock index is the second-most expensive among the four biggest emerging markets, based on profit predictions. The gauge has doubled from its March 9 low, helped by record low borrowing costs and increased government spending.
"If something looks too good, then we need to take it with a pinch of salt," said Tibrewal, 30, whose Principal Emerging Bluechip Fund's 120 percent return this year was almost double the gain in the Bombay Stock Exchange's 30-member Sensitive Index, or Sensex. The prices of most shares in the benchmark measure already reflect 2011 earnings, he said.
The Sensex is valued at 18.9 times estimated earnings, the most expensive among the so-called BRIC countries after China's Shanghai Composite Index, which trades at 22 times. Brazil's Bovespa index is valued at 16.1 times, while Russia's Micex trades at 12.6 times.
Disappointments
Second-quarter profit at some of India's biggest companies disappointed investors. Reliance Industries Ltd., the country's largest company by market value, last week reported operating profit that fell short of analysts' estimates.
DLF Ltd., India's biggest developer, whose net income fell for a fifth straight quarter, said this week the economy needs to expand by 7 percent to 9 percent a year for commercial property demand to recover. India's gross domestic product may expand by as little as 6 percent in the year to March 31, the central bank forecast.
The next six to 12 months will be a stock picker's market, said Tibrewal, adding that he gets his best investment ideas by talking to a company's competitors, clients and workers.
BNP Paribas yesterday predicted Indian stocks may gain as much as 32 percent by the end of next year as a recovery in companies' production output and more efficient use of factory lines help boost economic growth and earnings. Nomura Holdings Inc. also said this week Indian stocks entered "attractive territory" after the retreat from this year's high.
Tibrewal holds about 5 percent of the $300 million he manages in cash to buy stocks when prices fall. He's been selling shares of Shree Cement Ltd., which has surged more than threefold this year, to fund new purchases. He prefers Pantaloon Retail India Ltd., India's biggest retailer, and Asian Paints Ltd., as well as companies operating ports, tollways and utilities, and avoids telecommunication and cement stocks.
India Real Estate: Shaping Up As A Disaster
A break-neck run across many construction sites that dot the NCR region, and numerous satellite towns around New Delhi stretching as far apart as Rai, Rohtak, Rewari, Narnaul, Manesar, Noida, Indirapuram and Greater Noida reveal millions of dwelling in different stages of construction.
Most Apartment and commercial complexes are nowhere near completion, and from the looks of things will be no where near completion even a couple of years from now.
Worse, the sheer amount of space that will be coming off the shelfs suggests, most North Indian developers would be sitting upon inventories of atleast 4 years, without considering new and planned projects. The concept of bookings having been sold out on launch is as hollow as the construction itself.
Not only will these project executioners never deliver on time, there will be massive cost escalations, tinkering with FSI, final delivered super area and time schedules. It is unthinkable that Banks lending out loans to the first time buyers and speculators will not end up with NPAs that will equate in magnitude the sub-prime cum mortgage linked crisis that the West is now facing.
So sell all developers ranging from DLF, Unitech, Parsvnath, Omaxe, Ansal trio, Sobha, Purvankara and the lot...no questions asked.
Themes emerging from data, site visits and channel checks
We list key themes for the property sector following analysis of recent industry data and our recent site visits and channel checks with brokers in Delhi-NCR, Chennai and Bangalore:
1. Pan-India monthly residential sales volumes has moderated from an aggregate 19,700 units/month sold in March-May to 16,100 units in June- August across the markets we track. However, it should be borne in mind that this period may be seasonally weak and we await data for September- October to see if there has been a festive season pick-up.
2. Residential new launch absorption has fallen from between 40%-60% in April-June to about 20%-25% in Jul-Aug. We note the number of launches in Jun-Aug was lower vs. Mar-May and prices for some new launches have also gone up.
3. Moderation in affordable housing take-up . The inventory of unsold homes in the Rs0.5-Rs3.0 mn/unit range has been increasing through CY2009. Cumulative absorption is encouraging in pockets of NCR but below 40% in some markets like Chennai and Bangalore.
4. Office lease take-up weak but some green shoots. Take-up across the six major markets of Mumbai, Gurgaon, Bangalore, Hyderabad, Chennai and Kolkata in August 2009 was about 70% lower vs. August 2008. However, the trajectory in Mumbai and Bangalore has improved since March and it remains to be seen whether there is a significant pick up in 2010 with higher corporate budgets.
5. Execution ramp-up:
We visited some DLF and Unitech sites recently and while work is underway on a number of sites, some developers may need to deliver north of 10 mn sq ft pa if demand for affordable housing units is robust over the coming months. Execution of this scale would be more than what they have done in the past.
6. Channel checks indicate investor-driven residential demand, yet to see significant pick-up in office market:
Our channel checks in NCR and Chennai indicate that property investors have been quite active over the past six months with regard to take-up of new launches. Brokers we spoke
with also indicated that the office market has not witnessed a significant pick-up in volume, especially in Gurgaon and Chennai.
(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
