Capital Goods Stocks Lead Initial Drop

The benchmark index cut down in early trading in Asian bonds weaker, which fell after European Union finance ministers gathered this weekend in Poland, did not break new ground to address the debt crisis in the euro area. BSE Sensex fell 123.42 points, or 0.73%. Extension of the market was negative. Capital goods stocks are no worries, higher interest rates may affect investment plans for the Indian companies. Index heavyweight Reliance Industries (RIL) fell in early trade.

Q2 September 2011 with the drawing to the end, the emphasis can shift the expectations of Q2 results for individual companies. The decision to pre-tax payments made by the Top 100 companies on the basis of the country’s economic capital Mumbai apparently increased by 18% in Q2 September 2011. Tax collections are not as good, bad, or between companies and sectors, with the exception of the oil marketing companies, and has seen a decline in taxes paid.

At 9:28 IST the BSE Sensex was down 123.42 points or 0.73% to 16,810.41. The index fell 67.90 points to 16,865.93 day high in early trading. The index fell 161.38 points to 16,772.45 few days in early trade, its lowest level since September 15, 2011.

The S & P CNX Nifty lost 40.55 points or 0.8 to 5043.70%. The Nifty hit a low of 5040.85 in intraday trading, its lowest level since September 15, 2011.

The size of the market, indicating the overall health of the market was negative. On BSE, 505 shares declined and 411 shares rose. A total of 44 shares remained unchanged.

The 30-share Sensex pack, 26 fell and the rest of the squad. Tata Motors, Sterlite Industries and State Bank of India fell between 1.66% and 1.9%.

Index heavyweight Reliance Industries (RIL) fell 0.45%, with the broth for a second day. The retention payment of business taxes would increase by 67% to about Rs 2,000 crore in Q2 September 2011 over Q2 September 2010.

BP PLC will be able to start working to jointly develop oil and RIL gas blocks in India, but only after a contract revised production sharing is drafted and signed by the parties concerned, the upstream regulator said Thursday 15th September 2011. The modification of the production sharing contract has not yet signed. BP will come when the amendment is signed, said SK Srivastava, Director General of Hydrocarbons, journalists on the sidelines of an industry conference. In the production sharing contract, in agreement with the government explorers to bear the risks, costs of production and development in exchange for a share of production.

Srivastava said that RIL is yet to approach the regulator with a new project. RIL August 30, 2011 reached an agreement with BP to sell a 30% interest in 21 blocks of oil and gas exploration in India in the British explorer.

RIL had recently denied inflating the cost of its gas field in Krishna Godavari D6-(KG) basin. RIL made after the CAG report said that the final report to Parliament on Thursday 8 In September 2011, the RIL is initially estimated capital costs for gas-D 1 and D-3 in the discovery of $ 2.4 billion, later revised to $ 8.8 billion.

Maruti Suzuki India rose 0.92% on reporting at its two plants in Haryana resumed Sunday, September 18, 2011. It may be noted that the strike by about 1900 employees in India and Suzuki Powertrain Casting Suzuki has led to a shortage of rooms, including diesel engines and transmissions in some models of petrol cars of Maruti, which was forced to ‘Maruti to halt production on Friday, September 16, 2011, at its plants in Manesar and Gurgaon in Haryana.

Employees, Suzuki, Suzuki transmission and jets went on strike to express solidarity with the plant of Maruti workers’ Manesar. Maruti August 29 has 950 regular employees to sign a bond Manesar good behavior before they can enter the plant after the company said it has found a serious quality problems and deliberate, and suspended and fired 21 employees.

State-owned ONGC rose 0.19%, 5.61% extending to jump up last Friday petrol price could be reduced by sharing the burden on the government oil exploration is divided into a large under-recoveries from state oil marketing companies (PSU MAC) the sale of diesel fuel and cooking, the government set prices.

Meanwhile, the government Friday, September 16, 2011, reported by about Rs 11,000 crore Monitoring public offer (FPO) of ONGC. ONGC said in a statement that the government has decided not to proceed with the FPO by ONGC to the schedule contained in the prospectus dated 5 September 2011 and Red Herring will evaluate its decision with respect to the Freedom Party in its time. FPÖ was scheduled for September 20, 2011 and close on 23 September 2011.

Capital goods stocks are no worries, higher interest rates may affect investment plans for the Indian companies. Crompton Greaves, Bhel, Praja Industries, Siemens and Larsen & Toubro fell between 0.59% to 1.93%.

Foreign institutional investors (FIIs) bought shares worth Rs 395.16 crore on Friday 16 September in 2011, according to provisional data. Industry power was Rs 531.71 crore in two trading sessions of 15 and 16 September 2011, as the exchange of information.

A recent survey of investors prepared by JP Morgan India Asset Management benchmark Sensex ValueNotes expected to trade between 20,000 and 22,000 later this year. According to the report, the investment sentiment is affected by problems such as recession, increases the frequency of interest rates and volatility in the domestic investment environment. Despite seeing a decrease of 4.2 points from last quarter, the index of optimism among retail investors, “the highest levels of 137.5 points. The activity of small investors in mutual funds has increased by 11% from last quarter, according to the survey. The survey was conducted from July 22 to August 4, 2011.

The study also shows that investors are still cautious to preserve capital, increase investment strategy popular among small investors (40%). However, 40% for investors, compared to 57% in March 2011, is expected to become a little ‘aggressive in their investment strategy over the next six months.

In announcing an increase of 25 bps rate, the Reserve Bank of India (RBI) Friday, September 16, 2011, said it is imperative to continue with the current anti-inflationary, because a change in line start of monetary policy could cure inflation expectations and thus diluting the impact of policy actions earlier.

In recent weeks, due to global risk aversion, the rupee has fallen, which could have negative implications for inflation, the RBI said. Inflation remains high, widespread and well above the comfort zone of the Reserve Bank of India, he said. The central bank said Friday hike (September 16, 2011) of the repo rate should potentiate the effects of previous policy measures to contain inflation expectations and inflation anchor. As monetary policy acts with a lag, the total effect of the policy response is increasingly felt in the moderation of demand and inflation still path back towards the rear of 2011-12, RBI said.

In the future, monetary policy affects the signs of downward movement in the trajectory of inflation, which should promote moderation in demand and the impact of global developments, RBI said.

Although exports from India are very well in recent times, this trend is likely to last in the face of global demand weakens, RBI said. This, combined with the slowdown in domestic demand, which contributes to monetary policy, suggests that risks to growth projection for 2011-12 was in the July 2011 review of monetary policy have been reduced, RBI said .

Firms’ margins in Q1 June 2011 compared to moderate levels in many areas in Q4 March 2011. However, except for a few areas of significant pass-through increases in production costs are still visible, RBI said.

State fiscal imbalances widened during April-July 2011, mainly reflecting the impact of the decline in revenue receipts, combined with the pressure of the non-plan expenses due to higher oil revenues and fertilizer subsidies. The budget deficit of 55.4% of the budget in the first four months of this fiscal year was significantly higher than 42.5% during the same period last year (after adjusting for the over budgeted income spectrum ).

Reacting to the latest prices of RBI hiking, Navneet Munot, Office of Investment (DPI), the SBI Mutual Fund said, the delayed effect of past actions and the global environment moderate domestic demand and the path of inflation in the future, in our opinion. Our feeling is that the RBI is likely to take a break from the rate of today’s action. This should be viewed positively by the stock and bond markets. Feelings about the stock market should improve the visible signs of a peak rate cycle. Markets follow the global evolution and the movement of raw material prices.

Bank of America Merrill Lynch in a research note after the last race of the producer is still considered that the rate cycle in India is that growth could fall below 7.5% in the second half of 2011 and inflation is 7% in Q1 2012. The RBI will pause after a final 25 basis points (bps) rate hike October 25, 2011 and reduced the policy rate by 100 basis points since April 2012, he said. Increases in lending rates are almost done, and we expect a 75 bps from April to September 2012 season, of that note.

Reacts with the latest rate hike RBI Dhawal Dalal, Senior Vice President and Head of Fixed Income, DSP Black Rock Mutual Fund, said that the RBI is likely to increase the interest rate by another 25 basis points in the next policy review October 25, 2011. We expect the RBI to pay much more attention to the trajectory of inflation, focusing on core inflation. The RBI is not too worried about a possible slowdown in the number of GDP, and I’m sure the flexible nature of the economy Dalal said.

Secretary for Economic Affairs R. In Gopalan on Thursday 15 September 2011, said that the government raised the limit on loans from foreign companies $ 750 million $ 500 million. Indian companies can now borrow up to $ 1 billion Chinese yuan, Mr. Gopalan said. Relaxation of the rules of borrowing abroad to help Indian companies take advantage of cheaper foreign money in the midst of the credit will increase the cost of the local market. The United States and European countries have rates close the offer to support a weak economy.

Finance Pranab Mukherjee Tuesday, September 13, 2011, said the central bank in emerging economies have been forced to raise interest rates several times when they are struggling with high inflation, exposing them to capital flows volatile. A question of immediate interest to emerging economies is the management of capital flows, he said. Big capital and the volatility of flows to emerging markets can be unsettling, because they lead to volatile exchange rates high and in some cases, it is to maintain a high level of foreign exchange reserves as insurance against sudden and aircraft massive international capital.

Since the first IFI lackluster response to the government, and a strong upper limit of FII investment in corporate bonds issued by long-term infrastructure company in March 2011, the Board of Directors on Monday, September 12 In 2011, still a standard FII relaxed investment in such bonds. The Ministry of Finance said in a statement that FIIs can now invest in long-term infrastructure bonds, subject, limiting the maximum of $ 5,000 million, which has an initial term of five years or more, and the remaining time duration of a year for the first time to buy IFI. These investments are subject to a lock-in period of one year. IFI can sell their bonds with each other but can not sell to domestic investors during the lock-in period of one year.

FIIs can invest up to a maximum of $ 17 billion in long-term bonds below which a maturity of five years or older at time of issuance and expiration of three years at its original purchase by FII. These investments are subject to a grace period of three years. During the period of three years of blockade, FIIs can change, but can not sell to investors. The Securities and Exchange Board of India (SEBI) is expected to deliver notifications to incorporate these changes in the schedule for October 15, 2011.

SEBI had, in early August 2011 has allowed qualified foreign investors (QFIs) to endorse the plan’s debt mutual funds that invest in the sector subject to a maximum cumulative total of infrastructure $ 3 billion in the overall ceiling of 25 billion dollars.

Vice President Planning Commission Montek Singh Ahluwalia, Monday, September 12, 2011, told a conference that private financing account for half of investment in infrastructure planned $ 1 billion for five years during the years 2012-2017. Indian Prime Minister Manmohan Singh, told the conference that to overcome the crisis of funding for infrastructure projects, the government proposes the creation of a $ 11 million to help finance infrastructure projects. We have also established a high-level committee to propose the necessary measures to fund our ambitious program of infrastructure development, Mr. Singh said.

In the long-term rainfall in the second half of the season helped to alleviate concerns that the monsoon this year could fall below their long-term average, after a brief pause in July, when the country usually receives one third of monsoon rains. Initial estimates for the 2011-12 season Kharif rice select discography, oilseeds and cotton, while the output pulses can be calculated.

A good monsoon season in general, can improve farm incomes in rural areas and have an impact on the global economy through increased spending on consumer goods and lower prices for foodstuffs. But food prices are not necessarily fall if the rains and the long delay in some areas affecting crops.

Moody’s Investors Service confirmed the Baa3 rating for the debt of India’s foreign currency government and its Ba1 rating for local currency debt annual credit analysis published earlier this month. The company marks a positive attitude of bonds denominated in India rupees, and said it will consider a Baa3 stop shop for all obligations that India improves its financial position and its commitment to strengthen the domestic market. The outlook for foreign currency debt is stable.

Report optimistic about India’s ability to overcome the global economic crisis. Although not immune to the slowdown in international, domestic demand and prepare for the diversity of economic slowdown in the world are exposed to the fields, the report said. He noted that India’s foreign currency reserves than four times the foreign debt.

Debt ratio of 71% is worrisome, because the interest on this debt eats 25% of annual sales in India. However, Moody’s expects continued growth and gradual fiscal consolidation reduces the debt / GDP of the government, the report said.

Asian stocks fell on Monday, September 19 In 2011, when concern about the default back to Greece he enrolled at the center that Europe is losing patience with the country’s efforts to reduce its debt pile. Benchmark indices in China, Hong Kong, Indonesia, Singapore, South Korea and Taiwan fell by between 0.37% and 2.23%. Japanese equity markets were closed for a holiday.

Debt-zone debt worries resurfaced after the negotiations, one of Europe’s finance ministers to try to avert the growing debt crisis ended the weekend just a little progress. In addition, reports that Europe has warned Greece that financial assistance be refused if Athens to meet savings targets do little to help sentiment. Without the money, Greece would run out next month, according to reports. Greek Prime Minister George Papandreou, has decided to stay home rather than travel to the U.S. plans to preside over the emergency meetings with the greek government, reports said

The U.S. index futures indicated the Dow could fall 150 points at the opening bell Monday, September 19, 2011.

U.S. stocks rose for the fifth consecutive day Friday, and the S & P 500 scored its best week since early July on signs of euro zone leaders were acting in concert to limit the damage of its debt crisis sovereign. U.S. economic data showed consumer confidence rose slightly in early September, but the Americans are pessimistic about the future. A gauge of expectations fell to its lowest level since 1980.

Federal Open Market Committee (FOMC) is scheduled to conduct a policy review of US two-day yields of 20 and 21 September 2011. It is unclear whether the Federal Reserve announced new measures to boost the U.S. economy. Among the possibilities that the Fed might consider including a second round of the quantitative easing or EQ3, Twist operation, which is the purchase of long verse sells short-term bonds, so that lower rates long-term interest, and interest rates lower on excess reserves held by banks at the Fed to increase the monetary aggregates.


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