Daily News as on 28th July, 2010

INTERNATIONAL MARKET

Wall St dinged by consumer data, mixed results;  Asian stocks, euro ease on profit-taking

The S&P snapped a three-day winning streak on Tuesday after mixed earnings reports and a fall in consumer confidence, but analysts said US stocks were taking a breather and the rally could pick back up. Solid earnings from Dow component DuPont and Cummins Inc cheered investors, but that was offset by gloomy comments from steelmakers, including U.S. Steel Corp and AK Steel Holding Corp. Economic data was mixed. Home prices rose in May, but labor-market worries took July consumer confidence to its lowest since February.  The Dow Jones industrial average added 12.26 points, or 0.12 percent, to 10,537.69. The Standard & Poor's 500 Index dipped 1.17 points, or 0.10 percent, to 1,113.84. The Nasdaq Composite Index shed 8.18 points, or 0.36 percent, to close at 2,288.25.

The euro slipped from 11-week highs and Asian stocks marked time on Wednesday as a recent rally lost steam after a drop in US consumer confidence, while the Australian dollar fell on a sharp slowdown in inflation. The MSCI index of Asia Pacific ex-Japan stocks was largely flat in early trade, a day after hitting a 2-˝ month high. But Japan's Nikkei average bucked the global softness, rising 1.9 per cent on a weaker yen and strong corporate earnings. South Korea's stock index (KOSPI) edged up 0.1 per cent. The euro slipped below the psychological, and technically crucial, level of $1.30, having hit a high of $1.3045 on Tuesday.

 DOMESTIC MARKET

Markets stable; rate-sensitives mixed

The benchmark indices have been hovering above the dotted line in what is turning out into a stable session of trade. The Sensex is quoting at 18058, lower by 19 points and the Nifty is at 5425, down five points. The midcap index is at 7416, higher by 34 points and the smallcap index is at 9423, up 63 points. The interest rate sensitives are trading mixed on the day after the monetary policy event. Autos are calling the shots for the second consecutive day, while the realty and banking sectors have edged lower. In the auto space, M&M has strengthened by 1.8% at Rs 651 and has emerged as the top gainer on the BSE. Maruti has gained 1% at Rs 1221 and Tata Motors has added 1% at Rs 853. In the realty space, HDIL has weakened by 0.9% at Rs 259, Indiabulls Real Estate has shed 0.6% at Rs 161, DLF has edged lower by 0.1% at Rs 319 and Unitech has slipped 0.1% at Rs 84. And in the banking space, Axis Bank has fallen 1.7% at Rs 1358 and ICICI Bank has given up 1% at Rs 914. However, HDFC Bank has gained 0.7% at Rs 2080 and HDFC has added 0.3% at Rs 2951. The market breadth is positive; Out of 2610 stocks traded on the BSE, there are 1538 advancing stocks as againt 961 declines.

CORPORATE ANNOUNCEMENT

ABB clinches 75% stake in Indian subsidiary

Swiss engineering group ABB Ltd successfully raised its stake in its Indian subsidiary to 75%, boosting its position in the fast-growing Indian market. Shareholders of ABB India tendered about 23% of the outstanding shares, ABB said in a statement on Tuesday, adding that the offer had been oversubscribed by about 1.5%. In May, ABB said it wanted to raise its stake in ABB India Ltd to 75% from 52%. The offer constituted a premium of 34% to the closing price of the shares on the day before the deal was announced and valued the transaction at up to USD 965 million.

Asian Paints Apr-June net up on decorative biz

India's top paints maker Asian Paints said April-June net profit rose 23%, meeting street estimates, on rising sales in the decorative segment. The company is however concerned over rising raw material prices leading to pressure on margins in FY11. The paints maker reported quarterly net profit of Rs 2.01 billion on net sales of Rs 14.91 billion.

RIL Q1 net sales up 82% to Rs 58,228 cr

Mukesh Ambani group's flagship company Reliance Industries  (RIL) has announced its results for the quarter ended June 2010. It has reported net profit at Rs 4851 crore as against Rs 3636 crore, a growth of 33.42% on year-on-year basis. Net sales jumped 81.65% to Rs 58,228 crore from Rs 32,055 crore. Numbers were in-line with expectations; CNBC-TV18 expected net sales at Rs 59,300 crore and net profit at Rs 4820 crore.

SpiceJet to add 7 aircraft in FY11, 15 in next two years

SpiceJet will be adding 7 aircraft this fiscal, director Ajay Singh told CNBC-TV18. The budget carrier will look at adding 15 aircrafts in the next two years. Singh said the company will start international operations in the second half of this fiscal. According to him, the company's low cost model has been validated. He reiterated that there will be no rebranding exercise as of now.

SpiceJet Q1 net profit up at Rs 55.2 cr

SpiceJet has announced its first quarter results. The company’s Q1 net profit was up at Rs 55.2 crore versus Rs 26.3 crore. Its net sales were up at Rs 708 crore versus Rs 525 crore. The company's trailing 12-month (TTM) EPS was at Rs 2.54 per share. (Mar, 2010). The stock's price-to-earnings (P/E) ratio was 22.07. The latest book value of the company is Rs -15.43 per share. At current value, the price-to-book value of the company was -3.63

Honda India car unit to invest Rs $53.5mn

Honda's Indian car unit said on Tuesday it would invest Rs 250 crore (USD 53.3 million) on its engine and transmission facility in Rajasthan. The manufacturing facility will be completed by the end of 2010, Honda Siel Cars India said in a statement.

L&T sees 20% sales growth in FY11

Larsen & Toubro Ltd expects 20 per cent sales growth in the current fiscal year to March 2011 on the back of a pickup in orders, a senior official said on Tuesday. But the company is still seeing delays in project execution in the Middle East market, senior vice president R. Shankar Raman told reporters, after Larsen & Toubro announced its June quarter net profit that met street estimates.

Govt to mull ONGC, IOC stake sales in FY11: official

The government will consider selling stakes in explorer Oil and Natural Gas Corporation (ONGC) and oil retailer Indian Oil Corporation (IOC) in the current fiscal year to end-March, Disinvestment Secretary Sumit Bose said on Tuesday. Bose said the government expects to meet the fiscal year 2010-11 target of raising Rs 40,000 crore ($8.6 billion) from sales in government companies.

DOMESTIC EVENTS

India's perishable goods import at Rs 17,400 cr in FY10

India imported over Rs 17,400 crore worth perishable goods such as meat, edible oils and fruits in 2009-10 fiscal, Parliament was informed today. The total import of perishable goods such as meat, fruits, vegetable oil and other items in the country stood at Rs 17,419.33 crore in 2009-10 fiscal

RBI cautions govt on fiscal consolidation

The RBI today cautioned government that it should not be complacent about fiscal consolidation just because it got one-off high realisation of Rs 1,06,000 crore  from the sale of spectrum for high speed mobile and broadband services. Fiscal deficit further widened to over 6.5 per cent during 2009-10. As per the roadmap, fiscal deficit is now targeted to come down to 5.7 per cent in 2010-11, 4.8 per cent in 2011-12, 4.2 per cent in 2012-13 and 3 per cent the following year.

RBI hikes repo, reverse repo; CRR unchanged

The Reserve Bank of India (RBI) today increased its key benchmark rates to rein in a rising inflation rate and demand pressure. The cash reserve ratio, however, has been kept unchanged. In the First Quarter Review of Monetary Policy 2010-11 announced on Tuesday, the central bank increased repo rate by 25 basis points from 5.5 per cent to 5.75 per cent. The reverse repo rate has been increased by 50 basis points from 4 per cent to 4.50 per cent. Meanwhile, CRR remains unchanged at 6 per cent.

INTERNATIONAL EVENTS

US Consumer Confidence Falls, Lowest Since February

U.S. consumer confidence sank in July to its lowest since February on job market worries, underscoring the slow path to economic recovery, and home prices rose in May but without signs of a sustained rebound, reports released Tuesday showed. The group's index of consumer attitudes fell to 50.4 in July from an upwardly revised 54.3 in June, below the median forecast of 51 in a Reuters poll. The 20-city composite price index rose 0.5 percent on a seasonally adjusted basis in May after an upwardly revised 0.6 percent gain in April. Prices on an unadjusted basis jumped 1.3 percent in May, after a 0.9 percent April gain and falls in the six prior months. With the recent upturn, prices still are 29.1 percent lower than the peak four years ago.  Sales of new homes in June, reported on Monday, surged 23.6 percent but remained at the second-lowest level since the Commerce Department started keeping records in 1963.