Markets remain flat

Expect lacklustre trade for the rest of the week; the rally may be about to end in the short-term. But medium term outlook remains bright

The BSE Sensex edged higher than the previous day’s close after trading in a narrow range. The index closed 5.69 points higher (0.03%) at 17,941 and the Nifty closed 2.4 points lower (0.04%) at 5,366 points. We expect the market to remain listless for the next few days and even decline before a fresh rally begins.

In afternoon trading, the Sensex touched a 25-month high after which it pared its gains. It is now close to the psychologically important 18,000 level. Asian stocks were trading mixed today as markets consolidated after recent strong gains. Key benchmark indices in China, South Korea, Singapore and Taiwan were up 0.02% to 0.8%. The key benchmark indices in Japan and Indonesia were down by between 0.5% and 0.5% respectively. Markets in Hong Kong and Thailand were shut for holidays.

US markets ended higher on Monday, (5th April), on strong non-farm payrolls report and other positive economic data. The Dow Jones Industrial Average and S&P 500 closed at their highest levels since September 2008, while the Nasdaq closed at its highest level since August 2008. The Dow climbed 46.48 points to 10,973. The Nasdaq gained 27 points to 2,429 while the S&P 500 moved 9 points higher to 1,187.

Closer home, the finance ministry has suggested the simplification of the rules for calculating foreign investment in India. The proposed rule which takes out the sundry entries of indirect investment will be beneficial for companies with high foreign investments. The government initiative towards the GST (Goods & Services Tax) regime has started, with the Centre seeking opinion from the Supreme Court on the proposed amendments to the Constitution for the implementation of the tax. The largest bank of the nation, State Bank of India (SBI), said that it may raise lending and deposit rates within a few months.

The Bank will wait for the Reserve Bank of India’s (RBI’s) policy action before raising rates. Grain stocks as on 1st April stood at 42.8 million tonnes (MT) which are well above the target, the government said today. While wheat stocks were at 16.1MT against a target of 4MT, rice stocks were at 26.7MT, more than double the targeted 12.2MT. US treasury secretary Timothy Geithner said that India and the US should work together on “rebalancing” the world economy. In the bilateral economic partnership talks, he said that cooperation by both the parties will help to make the economy more stable.

Foreign institutional investors were net buyers of Rs766 crore on Monday. Domestic institutional investors were net buyers of Rs403 crore. The rupee was strong on continued capital inflows.

Sales of Tata Steel (up 1.3%) rose 18% in FY10 from the year-ago period. Castrol India (up 4.1%) issued 1:1 bonus shares. BHEL (up 2.8%) plans to reenter the wind turbine manufacturing business with foreign cooperation. NTPC (up 0.4%) plans to add up to 4,000MW-5,000MW of power in FY11. The company plans capital expenditure of
Rs28,000 crore-Rs29,000 crore—70% of which will be met through debt. 

DLF (up 2%) has appointed an advisor to find buyers for Aman Resorts, a luxury hotel chain it had acquired in November 2007, for $400 million. Tata Motors (down 0.9%) reported a 38% jump in sales in March 2010 from a year earlier. Reliance Infrastructure (up 1.9%) has commissioned a 600MW unit at the Rajiv Gandhi Khedar thermal power plant at Hisar in Haryana. Bank stocks edged lower on fears of a possible interest rate tightening by the RBI to control inflation. IT company Persistent Systems was listed on the bourses today. The company had priced its initial public offer at the upper end of the Rs290-Rs310 per share price band. CESC (down 0.8%) has raised Rs50 crore by selling short-term debt to a mutual fund. It sold commercial paper yielding 4.05%, maturing on 22 June 2010.


Cargo traffic in FY10 at 12 major ports up by 5.68%

However, growth has fallen short of the 580-million tonne target set by the government for the previous fiscal

Cargo traffic handled by the top 12 major ports grew by 5.68% to 560.68 million tonnes (MT) in the just-concluded fiscal against 530.35MT in 2008-09, indicating revival in exports as the world economy started to recover from the impact of the global financial meltdown.

“Our 12 major ports handled 560.68MT (of) cargo traffic in 2009-10, registering a growth of 5.68%. This shows buoyant growth in our maritime trade, coupled with indications of revival in exports,” joint shipping secretary Rakesh Srivastava told PTI today. He, however, admitted that this growth is 3.5% short of the 580-MT target set by the ministry for the fiscal year.

The 12 state-owned major ports—Mumbai, Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatnam, Cochin, Paradip, New Mangalore, Mormugao, Ennore, Tuticorin and Kandla had handled 530.35MT of cargo in 2008-09.

Mr Srivastava said though the traffic handled in 2009-10 fell short by 3.5% from meeting the 580-MT target set by the ministry for the fiscal, the growth was satisfactory given the adverse circumstances that the maritime trade faced in the wake of the global economic crisis.

The 5.68% growth during the past fiscal, he said, is more than double the mere 2.13% increase in port traffic reported in 2008-09.

The rise in port traffic during the last fiscal was triggered by a 21.02% jump in cargo growth to 78.22MT, coupled with a 6.25% rise in iron ore traffic, which increased to 102MT, the joint secretary said.

Most of the commodities handled by these ports reported growth in the last fiscal year, compared with the previous year, barring petroleum, oil & lubricants (POL), which declined by a hefty 37% to 197.21MT, the secretary said, adding that container traffic, which was hit directly earlier due to the global financial meltdown, grew by 4.32% in the reporting fiscal.

During 2007-08, cargo traffic had grown by 11.94% at 519.15MT over 463.78MT in 2006-07.


JNPT plans overseas foray

The container port is looking for a global footprint; it will also spend Rs500 crore on green initiatives

Major container port, Jawaharlal Nehru Port Trust (JNPT), plans to foray overseas as a port and container terminal operator, subject to government approval, a senior JNPT official has said, reports PTI.

“We plan to expand our operations abroad as a port and terminal operator, subject to government approval,” the official said, on strict conditions of anonymity.

JNPT was evaluating opportunities in southern Africa and Latin America, he said. The port has already held discussions with several parties, including Italian and Canadian entities, to evaluate the feasibility of jointly setting up a green-field port, he said.
JNPT will provide the necessary technical skills to establish and run an overseas port facility in the initial stages for which it would earn a royalty and other fees. At a later stage, it may invest in these ventures, he said.

The plan for evaluating foreign opportunities is subject to necessary approvals from the shipping ministry. The opportunity to expand overseas would enable the port to acquire a global footprint.

Besides, the port has also undertaken initiatives to become country's first ‘green port’.

“We have undertaken initiatives to become the country's first green port. The Rs500-crore initiative involves setting up wind and solar power units, usage of CNG vehicles in the port area, water harvesting and forestation, among others,” the official said.


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