Thursday, July 14, 2011

Market review-14 July 2011

The market may open lower after bomb blasts in three places in Mumbai on Wednesday evening. The terrorists strike in India’s financial capital killed at least 21 people and 141 were injured. Trading of S&P CNX Nifty on the Singapore stock exchange indicates a fall of 41 points at the opening bell. There was no immediate claim of responsibility for the blasts.

Key benchmark indices snapped three-day losing streak on Wednesday, 13 July 2011, as world stocks rose on stronger-than-expected Chinese Q2 June 2011 GDP data. The BSE Sensex jumped 184.40 points or 1% to settle at 18,596.02, its highest closing level since 11 July 2011. FIIs bought shares worth a net Rs 315.95 crore on Wednesday, 13 July 2011, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) sold shares worth Rs 368.91 crore on that day.

IT giant TCS and two-wheeler major Bajaj Auto are set to declare Q1 results today, 14 July 2011.

Reliance Industries (RIL) reportedly said it is not in talks to buy a stake in unlisted mobile phone operator Aircel. There was a buzz Reliance Industries is conducting due diligence on Aircel to buy a 74% stake owned by Malaysia’s Maxis Communications Bhd.

HDFC Bank’s 5-for-1 stock split takes effect from today, 14 July 2011.

On the macro front, the government unveils data on headline inflation for June 2011 today, 14 July 2011. According to a poll carried out by Capital Market, economists expect inflation at 9.7% for June 2011, much above the Reserve Bank of India’s perceived comfort level of 5% to 6%.

The government will today, 14 July 2011, unveil data on some wholesale price indices viz. the food price index, the primary articles index and the fuel price index for the year through 2 July 2011.

As the crucial corporate earnings season has begun, investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when Indian firms are witnessing cost pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the recent hike in diesel prices.

HDFC Bank, Ashok Leyland and Crompton Greaves report Q1 results on 19 July 2011. Wipro, Dr Reddy’s Lab and Exide Industries are set to announce Q1 results on 20 July 2011. Zee Entertainment Enterprises, JSW Energy, Biocon, Hero Honda, Hindustan Zinc and Kotak Mahindra Bank unveil Q1 results on 21 July 2011. Private sector bank Axis Bank reports Q1 results on 22 July 2011. Godrej Consumer Products reports Q1 earnings on 23 July 2011. Rural Electrification Corporation announces Q1 results on 25 July 2011.

Car major Maruti Suzuki, steel major JSW Steel, decorative paints major Asian Paints and Shriram Transport Finance Company are set to unveil Q1 results on 26 July 2011. Infrastructure Development Finance Company (IDFC) and Lupin unveil Q1 results on 27 July 2011. Cement major Ambuja Cements unveils results on 28 July 2011. ICICI Bank and Power Finance Corporation unveil Q1 results on 29 July 2011. M&M announces Q1 results on 8 August 2011. ABB announces Q2 results on 9 August 2011. Tata Power unveils Q1 results on 10 August 2011.

Industrial output in May 2011 rose a slower-than-expected 5.6% from a year earlier, government data showed on Tuesday. April’s industrial output growth was revised downwards to 5.8% from 6.3%. Manufacturing output, which constitutes about 80% of the industrial production, rose an annual 5.6% in May 2011, compared with a revised 6.3% growth a month earlier.

The annual monsoon covered the whole of India by 9 July 2011–a week earlier than the usual 15 July–but the total rainfall so far is 1% below normal, the weather department said on Sunday, 10 July 2011. The slight drop in rainfall is due mainly to a deficit of rains in Gujarat, Maharashtra and Andhra Pradesh. Gujarat is the country’s largest cotton and groundnut producer, while Maharashtra is the top sugar producer and Andhra Pradesh is a key rice producer. Rainfall in Gujarat was 60% below normal at 96.2 millimeters, while that in Andhra Pradesh was about 15% below normal.

The country’s oilseed sowing area until 8 July 2011 was 5.43 million hectares, down from 5.86 million hectares a year earlier. Rainfall in the month of July is considered crucial as sowing of a number of crops starts in June and good July rains determine the soil moisture and ensure proper development of the crops planted in June.

Asian stocks were mixed on Thursday after Moody’s on Wednesday said it may cut the United States’ triple-A debt rating. The key benchmark indices in Hong Kong, Japan, and South Korea were down by between 0.26% to 0.45%. The key benchmark indices in China, Indonesia, Singapore and Taiwan rose by between 0.11% to 0.2%.

Data on Wednesday showed that the Chinese economy grew a stronger-than-expected 9.5% in Q2 June 2011.

Moody’s Investors Service said it may cut the United States’ triple-A rating due to the rising chance its $14.3 trillion debt ceiling may not be raised by the 2 August 2011 deadline. Moody’s said it has placed the US government’s triple-A bond rating on review for possible downgrade because it fears a small but rising risk of a short-lived default.