The stock market investors, particularly FIIs, on Friday welcomed the Budget as much for its omissions as for its commissions. An intra-day gain of 420 points and a closing gain of 175 for the Sensex made for a happy picture with lots of green and few reds in the charts, in sharp contrast to the 870-point fall on last year’s Budget day in July.

The Sensex, which was trading with a gain of just 50 points mid-day, saw a “break out” and made accelerated gains after the Budget announcements on personal income-tax relaxation, the issue of bank licences to NBFCs and the fiscal roadmap.  The Sensex and the Nifty had surged more than two per cent at the close of the Finance Minister’s Budget speech. The Sensex soared to a high of 16,669.25 intra-day. Stocks came off their highs later, as many banks and insurance companies booked profits at the high point of the day, an institutional broker said. LIC itself booked profits at several counters, he said. DIIs were net sellers for Rs 859 crore on both BSE and NSE.

Institutional participation in the market was in the opposite directions with FIIs being net buyers for Rs 841 crore; they bought equities worth Rs 1,383 crore this week.

With the fiscal deficit being contained at 5.5 per cent, it will improve international interest, Mr Harjit Singh Sethi, Country Head-Institutional Equity Broking at Almondz Global Securities, said.

Day trading also took its toll with profit booking snowballing towards the end of the day. Retail investors were quick on their toes and sold equities worth Rs 81 crore on the BSE due to the surge they saw after a long gap.

Source:  Thehindubusinessline.

Koutons Retail India

New product and category launches to boost revenue
Koutons Retail is an integrated apparel manufacturing and retail company in India. Positioned as a value retailer selling high-quality fashionable clothing at affordable prices, the company targets lower to middle income group. Koutons Retail operates through its four brands namely: Koutons, Charlie Outlaw, Les Femme and Koutons Junior. Its flagship brand Koutons offers a wide array of men?s apparel ranging from formal to casual including party wear and targets men between the age group of 22-45 years. To cater to the needs of the fashion conscious youth, Koutons Retail recently re-launched its brand Charlie as Charlie Outlaw, which offers casual apparel for males between the age group of 14-25 years. Koutons Retail, which predominantly targeted the male population in the past, has now also diversified into manufacturing and retailing apparel for women and children through its brands Les Femme and Koutons Junior respectively. The Koutons brand is sold through around 1,360 outlets located throughout India spread across about 1.3 million square feet.

Remain cautious on global economy, vulnerable to double dip; risky assets to be under periodic pressure; dollar could rally in short-term: Stephen Roach

Stephen Roach of Morgan Stanley said that he remains cautious on global economy. He feels that the economy is vulnerable to double dip. Risky assets will be under periodic pressure. He feels that Asian markets are not factoring in weakness in economy yet. Dollar could rally in short term. He remains bearish on dollar over long term.

“I remain very cautious on the prognosis of the economy. Having gone through the worst crisis in our 75 yers I think the markets were compalcent and overly optimistic in rallying sharply in the final nine months of 2009 under the presumption that we would have a classic vigrouos v-shaped recovery. I think the recovery is going to be weak aneamic fragile potentially vulnerable to a setback or double dip and I think there reality is starting to hit home in overly exuberant financial mkts.

Well all major crisis have one thing in common they leave countries and individuals or business with a lot of debt. And so it is not unusual to have or get driven shake out once the worse is over. I think we are going to see that for some time ahead in terms of the riskier sovereign debt for markets of Europe. We could see ongoing debt problems for American consumers and we have certainly seen over 20 years of ongoing debt problems for the post bubble Japanses economy. So this is not an immediate reaction this is not you can dismiss and pretend it was just a bad dream.

I think again risky assets are going to be under periodic pressure not constant pressure from time to time over the next several years. The world is benefited over the past year to 15 months from the biggest liquidity injection in world history. And now as the world starts to stabilise its coming on a policy makers monetary fiscal like to withdraw this liquidity and that could certainly used to destabilise responses in many risky mkts.

I think the liquidity is hard to track, dollar for dollar rupee for rupee, in such a case where lot of liquidity is going to repair the whole in consumer balance sheets. In the case of Europe a lot of liquidity is going to repair a better banking system which has certainly been the case in US as well. It is not that the liquidity is being injected in the markets to boost share prices around the world. There is so much damage that is still lingering from this crisis that the liquidity is being directed at reparing that damage rather than providing a surplus of investible funds speculators.

Well emerging markets are in general and developing Asia particular had a truly spectacular run from March 09 to the end of last year. The region however remains heavily dependent on external demand under the rest of the global economy and if the global economy remains as shaky as I suspect then I think there could be some weakness to come in Asian economy that is not really factored into equity prices at this point in time. The idea of the coupling for me has always been a joke for a region that is most dependent on the rest of the world to sustain economic activity.”

Source:  Moneycontrol.

The first month of the new year was eventful for the market. Third quarter results (of good, bad and ugly varieties); some positive economic data flow; and monetary tightening by the central bank?the market was witness to all. The result season began on a good note with information technology companies reporting better than expected numbers and guiding for an improved performance in the next quarter too. However, the third quarter performance turned out to be mixed bag with banks and automobile companies reporting good numbers but infrastructure (Larsen and Toubro, Punj Lloyd) and some specific companies like State Bank of India and Oil and Natural Gas Corporation disappointing with a weaker than expected performance. This put a damper on market sentiments and in the last few sessions the market turned southward after remaining flat for most part of the month. The market ended January 2010 with a loss of over 1,000 points.

STOCK UPDATE:
•3i Infotech: Results largely in line with estimates
•Allahabad Bank: Healthy core performance
•Apollo Tyres: Robust performance continues
•Axis Bank: Upgraded to Buy
•Bajaj Finserv: A strong all-round performance in Q3
•Bank of Baroda: Results above expectations
•Bharat Heavy Electricals: Upgraded to Buy
•Bharti Airtel: Results in line with expectations
•Cadila Healthcare: Price target revised to Rs765
•Crompton Greaves: Price target revised to Rs478
•Deepak Fertilisers & Petrochemicals Corporation: Price target revised to Rs115
•Dhampur Sugar Mills: Price target revised to Rs191
•Godrej Consumer Products: Price target revised to Rs318
•HDFC Bank: Consistent as ever
•Hindustan Unilever: Upgraded to Buy
•ICICI Bank: Ready to shift gears
•IDBI Bank: Core performance improves, asset quality concerns remain
•Infosys Technologies: Price target revised to Rs2,822
•Ipca Laboratories: Price target revised to Rs1,470
•ITC: Upgraded to Buy
•Jaiprakash Associates: Price target revised to Rs183
•Lupin: Price target revised to Rs1,602
•Mahindra Lifespace Developers: Q3 numbers shine
•Marico: Results in line with expectations
•Orbit Corporation: Price target revised to Rs393
•Phillips Carbon Black: Price target revised to Rs205
•Piramal Healthcare: Upgraded to Buy
•Ratnamani Metals and Tubes: Price target revised to Rs149
•Reliance Industries: Price target revised to Rs1,148
•Shiv-Vani Oil & Gas Exploration Services: A strong performance in Q3
•Sintex Industries: Price target revised to Rs321
•State Bank of India: A weaker core performance in Q3
•Tata Consultancy Services: Price target revised to Rs867
•Torrent Pharmaceuticals: Price target revised to Rs554
•Zensar Technologies: Price target revised to Rs351
•Zydus Wellness: Upgraded to Buy

Eurozone bears on prowl
After yesterday’s trample, bears continue beating Indian market on a worldwide sell-off on Eurozone fear.
Global signals
The European bourses hit the 10-week low after fresh worries over the global economy. At the time of writing this report FTSE 100 was down by 1.61%.

All the Asian indices closed 1-3% lower. SGX Nifty slid 148 points.
US stock futures opened lower, as investors remains cautious ahead of the key labour data and the Economic Cycle Research Institute’s (ECRI) monthly inflation numbers.

Indian indices
Bears trampled the Indian markets second day on a trot, as global indices fell sharply on Eurozone debt fears. Taking lead from the extremely weak global sentiments, the BSE 30 benchmark index opened merely two points lower (which was also the day’s high) but extended the losses and breached the crucial 16000 level to touch the day’s low of 15725. The Sensex remained volatile throughout the session swinging 500 points in the process. At the finishing line, the Sensex closed at 15791, 434 points lower. Nifty also breached the 4800 level to close at 4719, 127 points lower.

Market sentiment
The market breadth, the number of advancing shares to declining shares, was extremely negative. Of the total 2,902 stocks traded on the BSE, 2,368 stocks declined, whereas only 487 stocks advanced. 47 stocks closed unchanged.

Sectoral & stock screening
All the sectors got drubbed during the day. Interest rate sensitive realty sector was hit the most and was down by 4.36% followed by the BSE Metal (metal index) that was down by 4.26%. The remaining indices fell in the range of 1.57-3.52%.

Bears hit all the Sensex stocks into red except Tata Power that was up 0.80%. On other hand Hindalco Industries (down 5.51%), Tata Steel (down 4.65%), Oil and Natural Gas Commission (down 4.54%), Jaiprakash Associates (down 4.46%), and Mahindra & Mahindra (down 3.93%) were hit the most.

Viewing volumes
Industrial finance company, IFCI saw highest trading with over 1.47 crore shares changing hands on the BSE followed by realty major Unitech (1.05 crore shares), wind turbine major Suzlon Energy (0.86 crore shares), Ispat Industries (0.64 crore shares) and Reliance Natural Resources (0.61 crore shares).

Fears about the global economy and sovereign credit hammered stocks Thursday, causing the Dow Jones Industrial Average to briefly cross below 10,000 for its worst day since April.

Other markets gyrated as well, with commodities reeling while Treasury prices and the dollar rallied as investors sought safety.

The Dow average /quotes/comstock/10w!i:dji/delayed  (INDU  10,002, -268.29, -2.61%) ended down 268.37 points, its worst one-day point slide since April 20, 2009. The measure was off 2.6% for the day to end at 10,002.18, a three-month low.

Throughout the day, investor fretted over signs that Europe’s governments are struggling to finance their debts and that America’s employment picture may not be improving as much as expected. Read related story on stocks sell-off.

“We may be in a run-for-the-hills scenario,” in the sovereign-debt markets, said Ben Inker, director of asset allocation at the portfolio-management firm GMO.

“You really do have to ask the question, what is the purpose of government bonds in my portfolio? If their purpose is to be the low-risk asset, what do we do if we don’t see them as low-risk and there aren’t yields to compensate us for that?”

In the credit markets on Thursday, the cost of insuring the debt of eurozone members with large budget deficits against default rose, dashing hopes that the European Commission’s qualified endorsement of Greece’s budget plan would calm investor fears.

Source:  Marketwatch.com

Raamdeo Agrawal, Director & Co Founder, Motilal Oswal Financial Services said no major surprises were there in the current earning season. JLR & Corus will change Sensex FY11 EPS estimate. The pace of FII selling could lead to nasty fall in the markets.

He further added that RBI’s GDP projection of 7.5% will go well with corporates. He was disappointed by L&T’s numbers but feels that company’s business is lumpy. He expects current disappointment in L&T numbers to be temporary and the company will report strong numbers after 2 quarters. He believes that one can’t expect any concession in budget. Also, there are some fears of hike in excise duty in budget.

Source:  Moneycontrol.

President Barack Obama renewed his pledge on Saturday to make job creation his top priority in 2010 but said it was also critical to rein in a record budget deficit that threatened an economic recovery.

Obama used his weekly radio and Internet address to remind Americans of the various proposals he put forward in the last week to spur job growth and tame a $1.4 trillion deficit.

“As we work to create jobs, it is critical that we rein in the budget deficits we’ve been accumulating for far too long — deficits that won’t just burden our children and grandchildren, but could damage our markets, drive up our interest rates, and jeopardize our recovery right now,” he said.

“But when so many people are still struggling — when one in 10 Americans still can’t find work, and millions more are working harder and longer for less — our mission isn’t just to grow the economy,” he said.

“Job creation will be our number one focus in 2010. We’ll put more Americans back to work rebuilding our infrastructure all across the country,” he said.

Obama emphasized proposals to achieve that goal: tax credits to help small businesses hire new workers and invest in new equipment, as well as the elimination of all capital gains taxes on small business investment.

Source:  Reuters.

Laurence Balanco, Asian Technical Research at CLSA said that key support for Nifty is seen at 4650-4700. He feels that Nifty can test 4700 level. He also feels that the breach of 4650 will lead to further losses. Next support beyond 4700 is at 4000.

He further said that Dollar Index can hit 83 mark. He feels that 4000-4300 is an attractive entry level from longer term perspective. He expect gradual step wise correction on S&P towards 1000.

Here is the video interview:

Source:  Moneycontrol.

The United States economy grew at its fastest pace in over six years at the end of 2009, but a sluggish job market is still souring economists on the sustainability of the recovery.

Gross domestic product expanded at an annual rate of 5.7 percent in the fourth quarter, well above analysts’ expectations. It had grown at an annualized rate of 2.2 percent in the previous quarter. Analysts had forecast annualized growth of 4.8 percent in the fourth quarter, and the better-than-expected result sent stocks higher when trading opened on Wall Street.

“It was an excellent report, but it’s not clear how sustainable this pace of growth is,” said John Ryding, chief economist at RDQ Economics. “We need numbers like this for the next two years, and I just don’t think we can achieve that.”

The biggest lift to economic activity came because businesses ran down their stockrooms at a much slower rate than they had earlier in the year. The change in inventories added 3.39 percentage points to the fourth-quarter change.

Slower inventory liquidation is not the most promising way to guarantee growth going forward, but economists are hoping that once companies become more confident about the recovery, they may ramp up production to refill stockroom shelves.

“What goes down wildly has to go up at a pretty good clip,” said Robert Barbera, chief economist at ITG.

Still, many economists worry more about trends in final sales to consumers and businesses.

Consumer spending grew at an annualized pace of 2 percent in the fourth quarter, after an increase of 2.8 percent in the third quarter. That is better than many had feared when the quarter began, considering that the cash-for-clunkers program was no longer around to help stimulate spending.

But consumer spending has still been disappointing to many economists, given the trends in previous recoveries. In the past, housing and consumption often helped drive growth in the wake of a recession.

Without the benefit of similarly bombastic inventory changes, many economists are expecting tepid growth in the quarters ahead. Ian Shepherdson, chief United States economist at High Frequency Economics, expects output to expand by a mere 1 or 2 percent, at an annualized rate, this quarter and next.

The biggest challenge going forward is the job market.

International trade over all increased last quarter, and exports grew nearly twice as fast as imports, helped along by a relatively weak dollar.

The G.D.P. number is a broad measure of the economy’s total output of goods and services. While it is, by definition, a backward-looking figure, analysts watch it to get a sense of where the country may be headed.

The number can be subject to major revisions, especially when the economy is at a turning point. The annual growth rate initially reported by the government for the third quarter of 2009 was 3.5 percent, but was later revised to less-impressive 2.2 percent.

The government’s final figure for last quarter’s G.D.P. will be released in March.

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