Indian Economy

India's Index of Industrial Production, in February slowed drastically to 3.6% from a 15.1% for the corresponding month last year, dragged down by poor performance of manufacturing, mining and capital goods sectors.

The growth was also slower than the revised growth rate witnessed in the preceding month. The cumulative index of industrial production for the first eleven months of this fiscal was 7.8%, down from last year's 10%. The data for January revised upwards to 3.95% from the earlier provisional figure of 3.7%.

Manufacturing sector, fell drastically by 3.5% from the 16.1% in the February of the preceding year.

The power sector's growth fell by 6.7% from the 7.3 % for the corresponding month last year.

The mining sector's figure sharply declined by 0.6% from a 11% in February last year. 15 of the 17 industry groups showed a positive growth in February, compared to the corresponding month of the preceding year.

Capital goods sector showed a negative growth of 18.4%, compared to a positive growth of 46.7% last February. Basic goods declined by 5.9% from 8.5% of February last year, while intermediate goods fell sharply by 8.4% from the 15.9% for the corresponding month last year.

Growth of the consumer durables sector dropped by 23.4 % from the 29.1% as on last February, whereas non-durables showed a positive growth of 6.1%, compared to a negative growth of 0.8% for the same month last year.

13th April, 2011

The markets opened on a negative note amidst mixed cues from Asian peers and tried to recover some ground in the morning trade but failed to cross]over into the positive zone. The markets slipped further during the day on profit taking and amid weak IIP data ending the day on a negative note. Most of the Sectoral indices ended in the red with Auto & Realty Being the major losers while Healthcare & FMCG ended flat. Among the Sensex stocks Reliance Infra (0.84%) and Cipla (0.63%) were the gainers while DLF (3.51%), Jindal Steel (3.01%) and Jaiprakash Asso. (2.96%) were amongst the losers. The Sensex lost 189 points or 0.97% to close at 19,263 while Nifty lost 56 points or 0.96% to close at 5,786.

Total traded turnover stood at Rs 91,785 cr. In equities FIIs were net sellers (Rs 691 cr) while DIIs were net buyers (Rs 264 cr).On the derivatives side, FIIs were net sellers in Index Futures (Rs 1951 cr) and Stock Futures (Rs 436 cr) while they were net buyers in Index Options (Rs 1392 cr) and Stock Options (Rs 10 cr).

The US markets ended lower on concerns that rising US stockpiles and subsequent lower demand may adversely affect the energy sector coupled with lower than expected Alcoa numbers . The Dow Jones lost 118 points or 0.95% to close at 12,264 while NASDAQ lost 27 points or 0.96% to close at 2,745.

The Asian markets are trading marginally lower. Nikkei is trading lower by 0.11% while Hang Seng is currently trading lower by 0.26%. The market breadth was negative throughout. FIIs turned net sellers in the cash segment while DIIs bought. The markets may open on a flat to negative note amidst weak global cues.

The trend deciding level for the day is 5800, If NIFTY trades above this level then we may witness a further rally up to 5820‐5850‐5875 levels. However, if NIFTY spot trades below 5865 levels then we may see some profit booking to initiate in market, it may correct up to 5770‐5745‐5720.

IT Sector Update

Q4FY11E expectations

·    Muted Topline: Q4 seasonality & new project commencements from Feb’11 to impact vol. growth (expect ~3-4% QoQ growth) with a stable pricing resulting in rev growth of ~4-5% QoQ (in INR terms).

·    Mixed EBITDA: Ex. Wipro, margins would be impacted by ~40- 60 bps QoQ due to lower utilisation & company specific events (higher S&M costs for TCS/ Tsunami in Japan for HCL Tech etc.)

·    Lower PAT: Lower forex gain vs. Q3FY11 to impact PAT performance

·    Other factors: BFSI & Retail among verticals lead the growth whereas ES/C* & IMS# continue to drive growth among services

Other operating trends to watch: Management direction on CY11E IT spend, visibility on discretionary spend, FY12E gross hires, wage inflation and supply challenges

Best Bets: TCS and Infosys remain BEST BETS driven by high growth in core BFSI vertical, market share gains in large deals/ client mining, pricing power from increase in Enterprise Solutions revenues, power focus on non-linear revenues and better placed to manage supply challenges.

11th April,2011

The markets opened on a positive note amidst mixed global cues and soon slipped into the red in the morning session. The markets however managed to trade near the previous close till the afternoon session but gradually moved lower throughout the day and ended on a weak note. Among the Sectoral indices Realty & Auto was the major losers while FMCG ended with minor gains. Among the Sensex stocks Bharti Airtel (1.56%) and ITC (0.88%) were the gainers while Jaiprakash Asso. (3.77%), DLF (3.73%) and Hindalco (2.99%) were amongst the losers. The Sensex lost 140 points or 0.71% to close at 19,451 while Nifty lost 44 points or 0.74% to close at 5,842.

Total traded turnover stood at Rs 1,08,894 cr. In equities FIIs were net buyers (Rs 385 cr) while DIIs were net sellers (Rs 128 cr).On the derivatives side, FIIs were net sellers in Index Futures (Rs 788 cr) and Stock Futures (Rs 561 cr) while they were net buyers in Index Options (Rs 1231 cr) and Stock Options (Rs 2 cr).

The US markets ended lower as stocks corrected on renewed concerns that rising crude prices will adversely affect global economic growth. The Dow Jones lost 29 points or 0.24% to close at 12,380 while NASDAQ lost 16 points or 0.56% to close at 2,780.

The Asian markets are trading mixed. Nikkei is trading lower by 0.33% while Hang Seng is currently trading marginally higher by 0.13%.

The markets ended on a soft note after a subdued trading session amidst concerns that rising crude prices, high inflation and rising interest rate may impact corporate earnings. The Industrial output data for the month of Feb’11 due by afternoon today. The markets may open on a soft note tracking mixed global cues.

The trend deciding level for the day is 5865, If NIFTY trades above this level then we may witness a further rally up to 5905‐5940‐5968 levels. However, if NIFTY spot trades below 5865 levels then we may see some profit booking to initiate in market, it may correct up to 5820‐5790‐5765.

8th April, 2011

The markets opened on a flat note and slipped lower trading in the negative throughout the morning session. The markets gradually recovered by afternoon session and traded in the positive zone for short while but slipped lower in the late session ending the day on a flat lower. Among the Sectoral indices Realty was the major gainers while IT and Oil & Gas were saw some selling. Among the Sensex stocks Reliance HDFC (2.31%) and Hindalco (1.79%) were the gainers while NTPC (2.61%), ONGC (2.10%) and TCS (2.00%) were amongst the losers. The Sensex lost 21 points or 0.11% to close at 19,591 while Nifty lost 6 points or 0.10% to close at 5,886.

Total traded turnover stood at Rs 90,247 cr. In equities FIIs were net buyers (Rs 221 cr) while DIIs were net sellers (Rs 212 cr). On the derivatives side, FIIs were net sellers in Index Futures (Rs 269 cr) Stock Futures (Rs 359 cr) and Stock Options (Rs 19 cr) while they were net buyers in Index Options (Rs 341 cr).

The US markets ended marginally lower on concerns of higher crude prices and fresh earthquake in Japan. The Dow Jones lost 17 points or 0.14% to close at 12,410 while NASDAQ lost 4 points or 0.13% to close at 2,796.

The Asian markets are trading higher. Nikkei is trading higher by 0.91% while Hang Seng is currently trading higher by 0.44%.

The markets ended on a flat note with sustained buying seen in mid caps and small caps. The markets may open on a flat to positive note amidst mixed global cues. Maintain a stock specific approach.

The trend deciding level for the day is 5885; If NIFTY trades above this level then we may witness a further rally up to 5910‐5940‐5970 levels. However, if NIFTY spot trades below 5900 levels then we may see some profit booking to initiate in market, it may correct up to 5865‐5835‐5800.