Daily Market View: Slower gains

As we suggested on Friday, the market went on to rise but a reversal can hit anytime. Watch out for 17,800

The market ended in the green on the positive sentiment triggered by the fuel price deregulation announced last Friday and the good monsoon forecast. The Sensex surged 200 points at 17,774 (up 1.1%) and the Nifty settled 64 points higher at 5,335 (up 1.2%). The indices started the day with a sharp rise. They traded range-bound till early afternoon and touched their intraday highs in the afternoon session taking a cue from European markets.

Asian markets were up on Monday on easing of concerns over the drafting of a harsh bill by Washington for regulating the banking sector and conclusion of the G-20 summit, where leaders agreed to take their own paths to ensure economic growth. Key benchmark indices in Taiwan, South Korea, Indonesia, Hong Kong and Singapore were up by 0.1% to 0.6%. Markets in China and Japan were down 0.4% to 0.7%. 

The US markets were up on the expectation that the financial regulation bill wouldn't weigh on Wall Street profits and as Oracle's strong results revived hopes about business spending. The Dow was down 9 points (0.09%) at 10,143.8. The S&P 500 was up 3 points (0.3%) at 1,076.7. The Nasdaq was up 6 points (0.27%) at 2,223.

Japan's retail sales expanded for the fifth straight month in May, though the growth in spending lost momentum as government stimulus measures faded. Retail sales rose 2.8% from the same month a year earlier, the government said on Monday.

World leaders agreed on Sunday (27th June) to take different paths for cutting budget deficits and making their banking systems safer. In a reversal from the unity of the past three crisis-era G-20 summits, the leaders left room to move at their own pace and adopt "differentiated and tailored" policies.

Back home, the weather office said that the annual monsoon should revive in two days after a 10-day lull, raising hopes for a pick-up in soybean planting. The rains were 12% below normal from 1st June to 27th June. Countrywide rainfall was 122.4 mm during the period against a normal 139.7 mm.

Foreign institutional investors were net sellers of equities worth Rs307 crore on Friday. Domestic institutional investors were net sellers of stocks worth Rs446 crore.

Venus Remedies (up 1.4%) has marked its presence in the Australasia region by receiving a patent from Commissioner of Patents, Trademarks & Design, Intellectual Property office of New Zealand for its antibiotic 'Potentox', a fixed dose combination of cefepime and amikacin. This combination is a super-specialty product indicated for the treatment of hospital-acquired pneumonia, community-acquired pneumonia and febrile neutropenia.

Reliance Industries (RIL) (up 2.3%) has announced its seventh oil discovery in exploration block CB-ONN-2003/1 (CB 10 A&B), awarded under the fourth round of the New Exploration Licensing Policy (NELP-IV). The well CB10A-N1 was drilled to a total depth of 1579 metres in Part A of the block.

HSIL's (up 0.9%) step-down subsidiary in The Netherlands-Haas International-has entered into a definitive share-purchase agreement to acquire 100% equity share capital of Barwood Products (Staffordshire), in an all-cash transaction. The acquired company is a small boutique manufacturer of specialised bathroom ceramics. With this acquisition, the building products division of HSIL hopes to get far greater reach in the UK and other European countries.


Core sector grows 5% in May

However, on a monthly basis, the key sectors—crude, petroleum refining, coal, electricity, cement and finished steel—showed a decline as they had expanded by 5.4% in April 2010

The six core infrastructure industries grew 5% in May against 3.2% in the same month last year, reports PTI.

However, on a monthly basis, the key sectors—crude, petroleum refining, coal, electricity, cement and finished steel—showed a decline as they had expanded by 5.4% in April 2010.

While crude oil production rose 5.8% in May against a negative growth of 4.3% in the same month last year, finished steel grew slightly lower at 2.5% against 2.8% in the same month last year, an official statement said today.

Petroleum refinery output, too, grew by a robust 7.7%, against a negative 4.3% in the year-ago month.

But coal production slowed to 0.1% in the reporting month against an expansion of 10.4% in same month last year.

As per the data, cement output also slowed down to 8.6% against a smart 11.8% in May last year. But electricity generation more than doubled at 6.4% from 3% last year.

In the first two months of the current financial year, the six core sectors, which have 26.7% combined weight on the overall industrial production, registered a growth 5.1% against 3.5% in the same period last year.


Auto exports may grow 15% this fiscal: Govt

The country's car exports registered a robust growth of 33.23% in the last fiscal, which was fuelled by a scrappage scheme rolled out by many European nations to boost small-car sales

The government today said the country's total vehicle export is likely to increase by up to 15% in the current fiscal, as demand from Europe is expected to rise, reports PTI.

"We may see a 10%-15% increase in auto exports over and above the last fiscal's export," joint secretary in the Department of Heavy Industry Ambuj Sharma told PTI.

According to the Society of Indian Automobile Manufacturers (SIAM), the overall vehicle export from India grew by 17.90% at 18,04,619 units in the last financial year, while the same stood at 15,30,594 units in 2008-09.

Mr Sharma said most of the European nations that are growing will lead to an increase in consumer spending and demand for auto sales in those regions.

The European nations are a major destination for the Indian auto industry's passenger car export.

The country's car export registered a robust growth of 33.23% in the last fiscal, at a time when many major global auto markets witnessed a decline.

The growth was fuelled by a scrappage scheme rolled out by many European nations during last fiscal to boost small car sales. Under the scheme, various governments had offered incentives to buy new cars in exchange of old ones.

Hyundai Motor India and Maruti Suzuki India made the most of this scrappage incentive programme.

The scheme, however, got exhausted and Indian car exporters are now exploring new destinations like the Latin American nations.

Export growth in the last financial year was good also in the two-wheeler category, which registered 13.54% rise. The surge in two-wheeler exports was led by Bajaj Auto, and Hero Honda, with sales of their motorcycles.

SIAM had earlier requested the Indian government to give impetus to overseas sales by various measures such as expanding the list of focus markets, which give duty benefits.


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