Friday’s Market Preview: Global cues indicate a flat-to-positive opening

The Indian market is likely to open flat-to-positive today on decent global cues. The US markets took a breather on the last trading day of September, despite strong economic data in the world’s largest economy. Business activity unexpectedly rose and fewer workers filed claims for jobless benefits, easing economic concerns. Markets in Asia were trading higher this morning as investors resorted to bargain-hunting. The SGX Nifty was up 30 points at 6,057 against its previous close of 6,027.

The market opened steady on unsupportive global cues yesterday. Choppy trading on the futures and options (F&O) contract expiry day saw the indices dipping in and out of the red on a couple of occasions. The weekly inflation numbers pushed the market to the day's lows but a splendid recovery at the fag end of the session resulted in a close above the crucial levels. The Sensex closed at 20,069, up 112.78 points (0.57%), off its mid-session high of 20,114. The Nifty settled 38.65 points (0.65%) higher at 6,030.

The US markets took a breather on Thursday after the recent gains, despite strong economic data. The Institute for Supply Management-Chicago’s business barometer rose to 60.4 in September, beating analysts’ expectations. The number of applications filing for jobless benefits fell by 16,000 to 453,000 in the week ended 25th September while unemployment rose to 9.6%.  This apart, the economy grew at a 1.7% annual rate in the second quarter, revised figures from the Commerce Department showed. The increase in gross domestic product compares with a 1.6% estimate issued last month.

The Dow fell 47.23 points (0.44%) to 10,788. The S&P 500 fell 3.53 points (0.31%) to 1,141. The Nasdaq fell 7.94 points (0.33%) to 2,368.

Markets in Asia were trading higher this morning as investors resorted to bargain-hunting, picking up stocks at lower values. In economic news, China's official manufacturing Purchasing Managers' Index for September improved to 53.8, compared with 51.7 in August while Japan’s August core consumer price index fell 1.0% on year, compared with a 1.1% drop in July, marking the eighteenth-straight month of decline. Upbeat data from the US also aided the gains.

The KLSE Composite gained 0.23%, Nikkei 225 surged 0.91%, Straits Times rose 0.25%, and the Seoul Composite was up 0.31%. On the other hand, Taiwan Weighted shed 0.11% in early trade. Markets are closed in Hong Kong and China for a public holiday.

Commerce and industry minister Anand Sharma on Thursday said the government has received "valuable" suggestions on opening multi-brand retail to foreign direct investment (FDI) and the decision on the issue will be guided by national interest.

The Department of Industrial Policy and Promotion (DIPP), under Mr Sharma's charge, has initiated a debate on the politically sensitive issue of allowing FDI in the multi-brand retail. It has received inputs from different stakeholders, besides the wings of the government, on the concept paper which was floated in July.

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Fiscal deficit falls 17% to Rs1.5 lakh crore during April-Aug

New Delhi: The Centre's fiscal deficit fell by 16.93% to Rs1,51,425 crore during April-August, 2010, year-on-year, on increased revenues from the auction of third generation (3G) spectrum, or radio waves, for mobile telephony, reports PTI.

 

The deficit represents 39.7% of the estimate for the current financial year. The budget for 2010-11 estimates the fiscal deficit, which represents excess government expenditure over its revenue, at Rs3,81,408 crore.

 

Towards the end of the first quarter of this fiscal, the government had collected over Rs1.06 lakh crore through the sale of spectrum for both 3G and Broadband Wireless Access (BWA) services against the budget target of Rs35,000 crore.

 

In the first five months of 2010-11, non-tax revenue receipts were Rs1,52,299 crore, crossing the full year target of Rs1,48,118 crore, mainly due to robust response for spectrum sale.

 

During the corresponding period last year, non-tax revenue receipts were at 35.9% of the estimate.

 

On the other hand, tax revenue receipts during April-August period reached 25.9% of 2010-11 estimate at Rs1,38,500 crore. The overall revenue receipts target is pegged at Rs5,34,094 crore for the current fiscal.

 

The total expenditure in the first five months of the current fiscal stood at Rs4,47,703 crore, thereby reaching 40.4% of the target for the full year.

 

The plan expenditure during April-August period was at Rs1,36,454 crore while non-plan expenditure stood at Rs3,11,249 crore.

 

The government's expenditure for the current fiscal is targeted at Rs11,08,749 crore.

 

The Centre's fiscal deficit targets went awry after it provided stimulus to the economy since December 2008 to blunt the impact of global financial crisis.

 

Against the target of reducing the deficit to 3% of the gross domestic product (GDP) by 2008-09, as per the Fiscal Responsibility and Budget Management (FRBM) Act, the Centre saw it double to around 6.2% that year.

 

Last fiscal, the deficit crossed 6.5%. After partial withdrawal of stimulus in the budget for 2010-11, fiscal deficit is now pegged at lower 5.5% of GDP in the current financial year.

 The Centre's revenue deficit in the first five months of the current fiscal stood at Rs1,00,352 crore, representing 36.3% of the target for the full fiscal.

 

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Thursday Closing Report: Trapped in a range between 19,800 and 20,200

The market opened steady on unsupportive global cues. Choppy trading on the futures and options (F&O) contract expiry day saw the indices dipping in and out of the red on a couple of occasions. The weekly inflation numbers pushed the market to the day's lows but a splendid recovery at the fag end of the session resulted in a close above the crucial levels.

The Indian market opened flat on ambiguous global cues. The indices touched early peaks but pared their gains to enter the negative territory amid a high degree of volatility. The benchmarks touched the day's lows on news of a rise in the weekly food inflation to 16.44% for the week ended 18th September. Selective buying pushed the market into the green albeit for a short while. The market again fell prey to profit booking in the post-noon session, but staged a splendid recovery in the dying moments of the day to close above the crucial levels.

The Sensex closed at 20,069, up 112.78 points (0.57%), off its mid-session high of 20,114. The index earlier touched a low of 19,864. The Nifty settled 38.65 points (0.65%) higher at 6,030. The benchmark oscillated between a high-low of 6,048 and 5,963, intraday.

The market breadth was negative today. The Sensex closed with 19 advancing stocks against 11 stocks in the red. The Nifty had 29 gainers and 21 losers today. The broader indices ended mixed; the BSE Mid-cap index lost 0.24% while the BSE Small-cap index added 0.11%.

The top Sensex gainers were HDFC (up 3.29%), Sterlite Industries (up 3.28%), Hindalco Industries (up 2.61%), ITC (up 2.53%) and Wipro (up 1.61%). The laggards of the index were ACC (down 1.49%), ONGC (down 1.48%), Reliance Infrastructure (R-Infra) (down 1.28%), Reliance Industries (RIL) (down 1.27%) and Reliance Communications (RCom) (down 0.85%).

The sectoral gainers were BSE Fast Moving Consumer Goods (FMCG) (up 1.40%), BSE Metal (0.82%) and BSE Bankex (up 0.76%). The sectoral losers included BSE Oil & Gas (down 1.17%), BSE Consumer Durables (down 0.89%) and BSE Auto (down 0.51%).

Food inflation increased to 16.44% in the week ended 18th September, climbing 0.98 percentage points from 15.46% in the previous week. This was the fifth consecutive week in which the rate of food prices has risen, after a spell of moderation in July and the first half of August.

The wholesale price index (WPI) based inflation for the month of August stood at 8.51%, according to the new Wholesale Price Inflation (WPI) series released by the government earlier this month. As per the old series with a base year of 1993-94, WPI inflation stood at 9.5% for the month.

Asian markets ended mixed as the ongoing financial crisis in European threatens to slow down the global recovery. Investors are opting for safer bets like precious metals instead of riskier assets like stocks. Chinese shares advanced despite Beijing taking new initiatives Wednesday to cool high property prices, ordering banks to halt lending for third and subsequent home purchases and raising the minimum down payment for all first-time home buyers.

The Shanghai Composite closed 1.72% higher, Jakarta Composite was up 0.17%, KLSE Composite was up 0.12% and Seoul Composite gained 0.34%. On the other hand, Hang Seng shed 0.09%, Nikkei 225 was down 1.99%, Straits Times was down 0.27% and Taiwan Weighted fell 0.04%.

The US market closed lower on Wednesday in the absence of any economic cues and on worries about the ongoing debt crisis in some Eurozone nations. Financial stocks were also weak as the government is getting ready to exit its investments in Citigroup and American International Group, made during the height of the financial crisis. The Dow slid 22.86 points (0.21%) to 10,835. The S&P 500 fell 2.97 points (0.26%) to 1,144. The Nasdaq fell 3.03 points (0.13%) 2,376.

Foreign institutional investors were net buyers of stocks worth Rs756 crore on Wednesday. Domestic institutional investors sold equities worth Rs835 crore on the same day.

Cadila Healthcare' joint venture (JV) company Zydus Nycomed Healthcare has commissioned the newly expanded active pharmaceutical ingredient (API) manufacturing facility at Navi Mumbai.

The company is expected to commence commercial production of APIs by December 2010. To begin with, the facility will be manufacturing Pantoprazole, Urapidil and Lornoxicam and by 2011 the company plans to produce eight additional APIs.

Cadila Healthcare settled 0.74% lower on the BSE today.

Real estate major IVRCL Assets & Holdings (down 0.89%) has successfully raised Rs250 crore from IFCI by subscribing to compulsorily convertible debentures (CCDs) for funding its subsidiaries.

These CCDs are non-dilutive at the holding company (IVRCL Assets and Holdings) and will be treated as equity at the project company level, reducing the need for investment by the company. The instrument has a coupon rate of 9% per annum.

The country's largest car-maker, Maruti Suzuki India (up 0.74%), today said it will ramp up production by about 10% to nearly 1.1 lakh units every month from October, taking its annual output to 13 lakh units in 2011-12.

The company expects to notch up its highest-ever monthly sales in September, with a growth of 32%-33% per cent compared to the same month last year. In the entire 2010-11 fiscal, it aims to sell 12 lakh units.

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