Thursday, December 18, 2014

MARKET MANTRA
Nifty has witnessed a correction of 666 points or 7.7 percent from the high of 8627 in just 9 trading sessions, which indicates the severity of the bear-onslaught. However, the level of 8000 would continue to provide the necessary bulwark for the bulls. The Nifty is now trading at 8098.55 up 68.55 points. 
Resistance: 8140 / 8170
Support: 8000 / 7950
The US market ended higher on Wednesday after the Federal Reserve replaced its pledge on keeping rates near zero from "for a considerable time' to 'can be patient' at the end of its two day Open Market Committee meet.
The key Asian indices rose today, tracking gains in US equities.
Fundamentally speaking, the domestic indices are expected to recover following dovish remarks by the US Federal Reserve on rate hike and continue to trade in the Green. 
Today's call: Buy A2Z Maintenance and Engineering Services Ltd at Rs.16.40 (in the BSE), for a target of Rs.18.5--26, in the short to medium term. Rakesh Jhunjhunwala is still  holding substantial stake in the company.
Jaiprakash Power Ltd is now trading at Rs.12, up 3.89 per cent in the NSE. Also, another of my recommended counter, ARSS Infrastructure Ltd is up more than 5% and is  now treading at Rs.36.50. Both the scrip would give decent returns from here, in the short term. 
Allied Digital Services Ltd another of my earolier reommnded counter today moved to Rs.22.50, up 3.21%. Meanwhile, there were media reports that, TATA CONSULTANCY SERVICES LTD has set an ambitious target of recording $1 billion in revenue from France within the next five years. This is a positive  news for whole, of the IT Sector.  

Monday, December 15, 2014

Market Mantra
Nifty fell down to 8216 on Friday, as the whirlwind correction took its toll, after an initial rise to 8322. At the end Nifty closed at 8224 with a net loss of around 69 points.
However, as is seen since the morning trade 8150-8170 is likley to provide support for Nifty. At present the Nifty_spot is trading at 8,218.35 down 5.75 points. However, for the moment the correction seems to be over. The traders are suggested to for Nifty longs at 8,263.90 with a target of 8400. The investors are suggested to go full hog on the rate sensitives as Repo rate cut is now imminent.;
RESISTANCE: 8270 / 8300
SUPPORT: 8170 / 8150

Friday, December 12, 2014

Wall St drops as oil price continues to descend
[Editor: When the Crude Oil is falling showcasing an impending slowdown of Global Economy (though many say it is due to some other extraneous factors like shale gas boom and cold war between Saudi Arabia and US), and both the CPI and IIP falling from grace, what is the RBI Governor doing? Trying to justify, whether Narendra Modi is right on wrong, in chalking out plans to make India a Manufacturing Hub? Silly!! If the highly qualified governor of the RBI starts analyzing Narendra Modi's pedestrian rhetorics, which are basically aimed towards "Mass (Public) consumption", then what to say!! However, I feel if the Repo rates are not cut immediately and the government fails to come up with quick measures to boost the Indian Economy, we might slip into a prolonged recession. The FII data and the direction of Nifty is what is likely to rattle both the RBI and the GOI in the next week]
NEW YORK - U.S. stocks fell on Friday, putting the benchmark S&P 500 on track for its first weekly decline in eight, following a further drop in oil prices and disappointing data out of China, the world's second-biggest economy.

The S&P index had broken a three-day skid on Thursday, buoyed by upbeat retail sales figures and other data that pointed to a strengthening U.S. economy, but finished well off its session highs as oil prices slipped.

Weak oil prices have added to worries about global demand and raised concerns about earnings for some energy companies, with year-end tax selling putting more pressure on the group. In addition, continued weakness in oil prices has prevented investors from bargain hunting the sector.

"It’s a time when most managers have underperformed their benchmarks so rather than stepping up to the plate on these stocks, they are avoiding them because they are trying to play catch up," said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

"'Don’t try to catch a falling knife' – that’s what you have here."

The S&P energy sector was down 1.4 percent for the session and is down about 16 percent this year as the worst performing of the 10 major S&P sectors.

Disappointing data that indicated China's economy showed further signs of softening in November weighed on the materials sector, which dropped 1.9 percent.

Investors shrugged off economic data that showed U.S. producer prices fell 0.2 percent in November and were muted even outside of energy, which may influence the U.S. Federal Reserve's plans to keep interest rates near zero for a "considerable time."

In addition, the Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment rose in December to a near eight-year high.

Brent crude slipped to a low of $61.91, its lowest since July 2009, and was last down 2.6 percent at $62.04. WTI crude dropped below $58 a barrel and was last down 3 percent at $58.14 as worries persisted over a global supply glut and sluggish demand.

The Dow Jones industrial average fell 181.03 points, or 1.03 percent, to 17,415.31, the S&P 500 lost 18.1 points, or 0.89 percent, to 2,017.23 and the Nasdaq Composite dropped 23.05 points, or 0.49 percent, to 4,685.11.

Adobe Systems rose 9 percent to $76 after saying it would buy stock photography company Fotolia for $800 million. It also reported quarterly revenue above market estimates.

ChemoCentryx Inc surged 62.1 percent to $7.28 after the company said its experimental drug met the main goal of reducing excessive protein in the urine of diabetics with progressive kidney disease.

Declining issues outnumbered advancing ones on the NYSE by 2,293 to 642, for a 3.57-to-1 ratio; on the Nasdaq, 1,804 issues fell and 805 advanced for a 2.24-to-1 ratio.

The benchmark S&P 500 index was posting 13 new 52-week highs and 34 new lows; the Nasdaq Composite was recording 32 new highs and 131 new lows.

Courtesy: Yahoo.com
WINNING STROKES: THINK DIFFERENT
Today also Pipavav Defence and Offshore Ltd touched Rs.48, before closing at Rs.45.80. As of  now there are lot of positive developments in the sector in which it is into. The investors can add the scrip, in all declines. However, short term traders can keep a SL of Rs.44. 
Glodyne Technoserve Ltd hit another buyer freeze today at Rs.3.82. However, avoid taking fresh positions in the counter, till more clarity comes on its functioning.
Allied Digital Services Ltd today closed in the green at Rs.22.20, up 4.72%. I have already mentioned that this is a turnaround story and hence don't sell the scrip in a hurry. After Q3FY15 results, the stock will cross Rs.32 and then Rs.37-42.
Nifty today broke its support at 8260 and is  now precariously placed near 8200, the next support level. The Nifty closed in the red today at 8,224.10 with a net loss of 68.80 points. The FII/FPI were net sellers of Rs.864.96 Cr of Indian securities today, while the DIIs were net buyers to the tune of Rs.323.41 Cr. However, the Nifty Longs are still an avoid till the market finds a base. But, the stocks would perform on an individual capacity, depending  upon the news flow and operator activities. 
India, Russia ink new nuclear-deal; Moscow most important defence partner, says PM Narendra Modi 
Photo: www.delhincr.amarujala.com
December 12, 2014: Unitedly opposing economic sanctions that do not have the UNSC’s approval, India and Russia on Thursday sought to strengthen their “special strategic partnership” by announcing a clutch of agreements in energy and defence, including Moscow’s help in building at least 12 nuclear reactors and a plan to manufacture advanced Russian military helicopters and defence spare parts in India.

Unveiling a “Druzhba-Dosti” vision statement for the next decade after a four-hour long meeting with Russian President Vladimir Putin, Prime Minister Narendra Modi pitched for “at least 10 more (nuclear) reactors” with the highest standards of safety. “It will include manufacture of equipment and components in India. This also supports our Make in India policy,” he said.

embed1A strategic vision document on nuclear power signed on Thursday said both sides would strive to complete the construction and commissioning of “not less than 12 units” in the next two decades, in accordance with the 2008 agreement. Towards this objective, the Indian side agreed to expeditiously identify a second site, in addition to Kudankulam, for the construction of the Russian-designed nuclear power units in India.

“We have just signed a document of great significance — the strategic vision for strengthening Indian-Russian cooperation in the peaceful use of nuclear power. It contains plans to build over 20 nuclear power units in India, as well as cooperation in building Russia-designed nuclear power stations in third countries, in the joint extraction of natural uranium, production of nuclear fuel and waste elimination. This will lay the foundation for our long-term mutually beneficial cooperation in the nuclear sector,” said Putin.

Russian government officials said Moscow has “in principle” agreed to the Indian nuclear liability law, factoring in the costs involved in the process. This led to the signing of the supplement to the General Framework Agreement (GFA) for Units 3 and 4 of Kudankulam nuclear power project between Nuclear Power Corporation of India Limited (NPCIL) and Atomstroyexport on Thursday.

The issue of nuclear liability has been dogging the sector, as the American and French firms have not been able to overcome the issue. This has prevented the US and French nuclear firms from starting work on setting up the nuclear power projects in the last five years.

Stressing that Russia would remain India’s most important defence partner “even if India’s options have increased”, Modi said, “We discussed how to align our defence relations to India’s own priorities, including Make in India… Russia has offered to fully manufacture in India one of its most advanced helicopters. It includes the possibility of exports from India. It can be used for both military and civilian use. We will follow up on this quickly.”

He also proposed that Russia should locate in India manufacturing facilities for spares and components for its defence equipment. “He responded very positively to my request,” said Modi.

“During our meeting, we paid special attention to trade and economic issues. By the end of 2013, our trade turnover reached $10 billion, but we believe — and it is obvious — that this is absolutely insufficient. We had a detailed discussion on the practical measures required to diversify our mutual trade and further enhance investment; we agreed to stimulate companies in both countries to activate joint work and to speed up the transition to the use of national currencies in mutual settlements,” said Putin.

He said they also agreed to be “more active” in supporting joint high-tech industrial and research projects. “We will assist in creating an Indian mobile operator. We are interested in the Indian initiative to build a Delhi-Mumbai industrial corridor… A bulldozer equipment assembly line will soon reach design capacity. In 2016, with the assistance of Russian company Sibur Holding, we will complete the construction of one of the world’s largest butyl rubber producing plants in Mr Modi’s home state of Gujarat,” said Putin.

In their joint statement, the leaders agreed to step up efforts to enhance bilateral trade, setting a turnover target of US$ 30 billion by 2025. It is expected that mutual investments by then will be over US$15 billion.

In this context, the two sides decided to work towards enhanced cooperation in “oil and gas sphere”, and said they would study the possibilities of building a hydrocarbon pipeline system connecting Russia with India. “It is expected that Indian companies will strongly participate in projects related to new oil and gas fields in the territory of the Russian federation,” said the statement.

Stressing that Russia is the world’s top source for hydrocarbon resources and India one of the world’s largest importers, Modi said, “Yet, despite our close friendship, our collaboration in this sector has been disappointing. Today, we have made a new start with a few important agreements. But, we will set an ambitious agenda for partnership in oil and natural gas.”

They also agreed to examine avenues for participation in petrochemical projects — in India and Russia as well as in “third countries”.

Putin said new prospects would open up for Russian-Indian cooperation with the launch of the Eurasian Economic Union (EEU) on January 1 next year. “Mr Prime Minister has just mentioned the possibility of establishing special relations between India and the EEU. We agreed to continue consultations on a free trade zone agreement,” he said.

On terrorism, the leaders condoled the loss of lives and agreed to work together for the adoption of the Comprehensive Convention on International Terrorism by the 70th anniversary summit of the UN. “The leaders expressed hope that all safe havens and sanctuaries for terrorists will be wiped out without delay and terrorism will be completely eradicated from the common region within a decade,” the statement said.

“India and Russia oppose economic sanctions that do not have the approval of the United Nations Security Council,” it said. Pushing for the UN’s central role in international relations, they said they would work together to promote a “polycentric” and “democratic” world order based on shared interests of all countries.
The two countries signed 20 agreements — eight between government entities and 12 between private enterprises — in the fields of nuclear energy, oil and gas, health, investment, mining, media and wind power.
Putin also met President Pranab Mukherjee, Congress president Sonia Gandhi and vice-president Rahul, and attended a conference on rough diamonds in Delhi.

Courtesy: Indian Express
India eyes oil, defence deals, Russia looks to boost trade
December 11, 2014: The plan to chart out a 10-year vision
 An Indian Army T-90 tank
Photo: India Strategic
statement – aimed at giving a fillip to India-Russia ties by bolstering cooperation in defence, nuclear power and hydrocarbons – would be high on the agenda of the meeting between Prime Minister Narendra Modi and visiting President Vladimir Putin on Thursday.

As many as 15 to 20 pacts for both the government and the private sectors are expected to be signed during the day-long visit by the Russian leader, who was scheduled to arrive here on Wednesday night. He would leave on Thursday night after meeting his Indian counterpart Pranab Mukherjee.

An oil and gas pipeline from Russia to India – on a route similar to the proposed Turkmenistan-Afghanstan-Pakistan-India (TAPI) pipeline – would also be on the agenda.

Sources said while Putin would make a push to boost trade relationship between the two nations in the face of western sanctions, Modi would pitch for “Make in India” and try to woo Russian investors.

The two leaders are scheduled to reach Hyderabad House at around 11.30 am for a one-on-one meeting, which will be followed by lunch. Talks will continue after lunch with the delegation members joining in.

With Putin’s visit coming one-and-a-half months ahead of US President Barack Obama’s trip, the Indian side wants Russians to commit potential investments in defence and nuclear power sectors. One of the key elements of the vision statement could be joint development and production of the components for building nuclear power plants, the sources said.

They said specific discussions are likely to take place on various key projects, including the ambitious Fifth Generation Fighter Aircraft (FGFA) programme.

Putin and Modi would meet for their first annual summit on Thursday, although it would be their third meeting this year. The annual summit has been taking place since 2000 alternately in Moscow and New Delhi.

Ahead of his visit, Putin had termed ties with India as “privileged strategic partnership”, and said construction of new nuclear plants besides military and technical cooperation was high on the agenda for talks. He said Russia was keen to export liquefied natural gas (LNG) to India and involve ONGC in oil and gas hunt in the Arctic.

In the nuclear energy sector, Russia might offer to set up 20-24 nuclear energy production units in India against previously agreed 14-16 plants.

Russian Ambassador Alexander Kadakin said the two countries soon would start negotiations for setting up the fifth and the sixth units of the Kudankulam nuclear power complex and might also sign a technical pact for units three and four during the President’s visit.

Both leaders might also discuss improving supply of rough diamonds by Russia to India. Russia is the world’s top producer of rough diamonds and India is one of its largest importers. The two leaders would also inaugurate the World Diamond Conference here on Thursday.

Courtesy: Indian Express
Russian, Indian funds to invest $1 billion in infrastructure
Kirill Dmitriev, chief executive of the 
Russian Direct Investment Fund
NEW DELHI, Dec 11, 2014:  The Russian Direct Investment Fund will team up with an Indian partner to invest $1 billion in infrastructure and hydroelectric projects in Asia's third-largest economy, the head of the Russian state fund told Reuters on Wednesday.

The RDIF and India's IDFC, a leading infrastructure investor, will each commit $500 million to projects under a deal to be signed on Thursday during Russian President Vladimir Putin's visit to India.

Prime Minister Narendra Modi wants to overcome India's chronic power shortages, and the country has vast untapped hydroelectric potential in its northern Himalayan belt.

RDIF head Kirill Dmitriev told Reuters the investments would back projects involving a large Russian hydro-power company but he declined to name the company.

The only large Russian player in this area is state-controlled Rushydro (HYDR.MM). Rushydro's spokeswoman Yelena Vishnyakova could not immediately be reached by for comment.

IDFC, which is 16 percent state owned, confirmed it would sign a partnership with RDIF but declined to comment on the details.

The Russian fund was set up in 2011 with $10 billion in state funds. It can back investments as long as its partners match it at least dollar for dollar. Dmitriev said he expected to commit funds to the Indian projects next year.

The RDIF has so far invested $1.3 billion of its own money along with $6 billion by outside investors, mainly sovereign wealth funds from the Middle East and Asia.

Dmitriev said the RDIF had managed to turn profits on investments in a Russian telecoms company and the Moscow stock exchange despite Western sanctions, a slowing economy and sliding oil prices.

(Reporting by Douglas Busvine; Additional reporting by Katya Golubkova in Moscow and Tommy Wilkes in New Delhi. Editing by Jane Merriman)

Courtesy: The Reuters
P/E Ratio: Hidden Meaning
I have often spoken about Ashok Leyland Ltd (Rs.50.45; P/E: 53.67) and Eicher Motors Ltd (Rs.14051; P/E: 74.83) having high (abnormal) P/E ratios, in various platforms including this blog. And then cautioned long terms investors against accumulating these counters, without proper research. Right?

But, what is PE Ratio? It is current price of one share divided by earnings per share. For example, a stock that has a P/E ratio of 25, indicates that it will take 25 years of a company’s earnings, proceeding at the current rate, to add up to the original purchase price. Wow!! Did you ever think of this aspect also?

And, therefore, when a company has P/E of 50 plus, then what does it tell us? Have you ever thought, what will be your age, after 50-plus  years, when you would get the real value of  your investments? Well I can guess many have not while purchasing such shares, as they are mostly guided by the Tip-providers or by the FREE advises (they get in electronic and print media). 

However, a high PE Ratio, sometimes does indicate that majority of the investors expect very high  growth in a company’s earnings in the future. Or market feels that some sectors could show stupendous growth trajectory in future. 

But, many a times this chart of "Over-optimism'" goes  upside down as it happened in case of Suzlon Energy Ltd, once the "Blue-eyed-boy" in the 'Green Energy Space". And then what happened? Yes, the story of Humpty Dumpty was  re-visited.

Who were pioneers in this kind misleading campaigns--mostly the TV--analysts or SEBI-registered marketmen. 

Now also, the same thing  has started. Therefore, think twice before jumping your guns on the high P/E companies. 

Thursday, December 11, 2014

Initial euphoria wanes, India Inc worried about Modi government's 'lack of boldness' 
Tokenism and Propaganda
Photo: Daily News
[Editor: When I was saying this 3-4 months back, then very few had the time to listen to me, especially those "Rabid" Narendra Modi sycophants. During that period, I was the butt of regular abuse for my posts (in Facebook) which criticized some of the policies of Narendra Modi (after which I almost left Facebook); but India Inc, including "Oilers", like Uday Kotak, were at their best, singing paeans in favour of our "Modi-Maharaj"
Now suddenly what happened? Reality, at last came in front of all the BLIND and INSANE, Narendra Modi fans, who are also ready to clean public toilets because their "Guru" has asked to keep India clean, taking a leaf out of the pages of M K Gandhi. These morons forget that cleaning "Public Toilets" and "Public Drains", is a hazardous job, because a new comer (or an amateur), might get severe infections from the dust and dirt (Harmful Bacteria, Viruses, Worms, etc), there....It is to be noted and I am sure all my doctor friends will agree, that all persons do not have strong immune systems to withstand dangerous pathogens. Also, cleaning ones' own premises is different than cleaning public drains. Therefore, these kinds of jobs should be left to the discretion of professional scavengers (and sweepers). But in our country, there is no dearth of "High-Voltage-Copy-Cats" and "Brain-dead" Individuals. Moreover, now all those media channels who were instrumental in creating these kinds of FALSE euphoria, including the Times of India Group, should be pulled up. Besides, if our Prime Minister spends so much time in these kinds of "useless" works, then where is the time to think for building India from a scratch?]
NEW DELHI, 10 December, 2014: Six months after Modi Sarkar assumed power amidst great expectations, many industrialists are concerned about what they see as a lack of boldness in reforms and an absence of radical ideas. As a result, they are largely unwilling to commit fresh investments in the country at a time the infrastructure sector is in a virtual logjam because of high debt.

At a closed door, barred-to-media session of the Confederation of Indian Industry last Saturday, December 6, some of India Inc's most prominent voices asked whether the government is doing enough to jumpstart growth, unlock infrastructure and spur fresh investments. While business leaders conceded the mood was upbeat, they said a lot more needed to be done for fresh investments to kick in. 

"This government has moved us from despair to hope... but now I think that hope is waning," said GVK Power & Infrastructure Vice-Chairman Sanjay Reddy, according to people present at the meeting. "The government actually needs to take a bold line and has to say we are going to move away from the past. But we are not seeing that happening at the moment," added SRF Chairman Arun Bharat Ram, referring to labour reforms and the role of the public sector. "One of the biggest opponents to labour reforms is BJP's own trade union and if what we are going to see is every move being weighed politically, we are in the same boat as before," he added.

Arun Bharat Ram's office told ET he wasn't present at the CII meeting, but two attendees confirmed to ET that he was indeed there and had voiced his opinion. GVK also denied that Reddy had made any such comments at the meeting. Biocon founder and Chairperson Kiran Mazumdar-Shaw expressed concern over the BJP government following in the footsteps of its predecessor by floating new welfare schemes in healthcare.


"I am personally very concerned about the government's focus on a universal healthcare programme. As we all know, it should be a sustainable model, it cannot be an overarching free-for-all scheme... there should be some co-pay. Social welfare schemes shouldn't be about doling out freebies and creating an entitlement culture that is detrimental to growth. The government is very pro-growth, but within that, we need to be very sensitive and conscious of the social welfare area," said Shaw, who attended the meeting. She told ET later that "a lot of industry members (at the meeting) talked about how much reforms this government can actually bring in". Shaw also confirmed her comments at the meeting. "What we are seeing right now is reforms that are minor tinkering. There is a lot of interest in Indian stocks, but where is the investment in new projects? Everyone is playing wait and watch," she added. 

Columbia University Professor Arvind Panagariya, who is an advisor to Rajasthan's BJP government, is learnt to have said that things which should have happened by now, such as new norms for land acquisition, removing tax uncertainty and recapitalisation of banks, haven't taken place. "India is a little behind on the growth curve... and I am slightly disappointed," he said. Panagariya did not respond to ET's email. 

Veteran industrialist Dhruv Sawhney, chairman of the Triveni Group, said the capital goods sector, in the first six months, is still at 60 per cent of where it was in 2011. "This feedback should be given. This sector hasn't taken off even till end of November. It's quite widespread. That shows the actual investment on the ground is not happening," Sawhney is learnt to have said. Sawhney's office said he was out of the country and was unavailable for comment.

Janmejaya Sinha, chairman of The Boston Consulting Group's Asia Pacific unit, expressed concern over the state of the PSU banking sector and suggested the government could consider lowering its stake to 33 per cent. "Credit is not picking up, we cannot get out of this bind," he is learnt to have said. People familiar with the situation told ET that CII President Ajay Shriram started the discussion by inviting participants to air their views in an open and frank manner. Shriram said Finance Minister Arun Jaitley was keen to assess "the pulse and the buzz" in industry circles.

Bharti Group Chairman Sunil Mittal praised the efforts of the new government to turn around the economy and urged fellow CEOs to be patient. "Industry should be patient as reforms would take a few years," Mittal is learnt to have said, adding that the new government was a "welcome change in terms of its approach to industry... and that it has the gumption to say we will go for growth and amend laws".

ET spoke to several other people familiar with the discussions at CII's National Council meeting on Saturday. Many of them described in great detail what transpired in the meeting on the condition that they not be identified. When asked about the meeting, Ajay Shriram, who presided over the discussions, said, "Industry appreciates that changing the system is not possible 'overnight' and is waiting for the next Budget for the government to articulate its vision for the next four years".

GVK's Reddy is also learnt to have said that while the government's "intention is good, industry is yet to see any bold action...global investors are still waiting and watching if the government is really serious". He is also learnt to have listed several financial and structural problems holding back infrastructure. When asked about Reddy's comments at the meeting, a GVK spokesperson told ET: ".... Probably there has been some misunderstanding regarding the same and we would like to reiterate that there is absolutely no truth in it".

Several attendees confirmed that Reddy spoke in detail on problems facing the infrastructure sector. When contacted, Feedback Infra Chairman Vinayak Chatterjee, who attended the meeting, said he had suggested some measures to revive the infrastructure sector. "First, jumpstarting infrastructure through public expenditure as is being done in the highways sector, second, pushing through Rs 18 lakh crore of stalled projects and, third, resetting the public-private partnership or PPP model." 

WINNING STROKES: THINK DIFFERENT
Today's call Max India Ltd at around Rs.400-401 today touched Rs.413.20, intra-day. The short term target for the scrip is Rs.440.
Pipavav Defence and Offshore Ltd (Rs.46.90) today confirmed the break out and closed above its 21D, 50D, 100 D and 200D, SMAs. The share price is also above its  21D, 50D, 100D, 150D and 200D, EMAs, showing further bullishness for the scrip. The scrip today moved with good volumes in both the exchanges. The next target for the scrip is Rs.52.
Today, 8300 support of Nifty was broken. In the morning the Premium members were asked to exit Nifty longs in any intra-day bounce. The CNX Nifty tanked by 62.75 points to close at 8,292.90. Today FIIs were net sellers of Rs.808.27 Cr of equities. Yesterday, I had mentioned that with this kind of direction-less policies, it would be difficult to attract more and more FII money. Our Prime Minister is a totally confused man and this is seen in his substandard speeches and in his policies. 
Today Glodyne Tech Ltd hit another buyer freeze at Rs.3.64  in the BSE. But avoid putting fresh funds in its share and exit on rise. The husband-wife duo (Promoters) have sucked the company from top to bottom, and now there is only skeleton left. 
Mid-cap stocks soar in falling market
11 Dec, 2014: The Sensex has declined almost 850 points in the last four days but about 60 mid-cap stocks from the BSE 500 index have managed to stay resilient.

Stocks such as HMT, Jet Airways, Zydus Wellness, Pipavav Defence, NCC, BEML Page Industries and MRF have gained between 5% and 40%, although for different reasons. 

"The Indian stock market fell not because of domestic reasons but due to global weakness. Many investors, waiting for an opportunity to enter the market, bought some quality mid-cap stocks at every dip in the falling market," said Devang Mehta, head of equity, Anand Rathi Financial Services —Rajesh Mascarenhas 

Courtesy: The Economic Times 
Russian President to Visit India for 1-Day Summit
[Editor: This visit is likely to have positive effect on the India's defence related companies. Already the stocks like Pipavav Defence and Offshore Ltd (Rs.48) is already reacting positively to this news]
NEW DELHI, December 10, 2014: Russian President Vladimir Putin is visiting India for a one-day annual summit Thursday that will seek to reinvigorate a once-close relationship that has lost some of its spark in recent years. The visit will focus on deepening energy and trade ties.

Out of the dozen or so agreements that New Delhi and Russia are expected to sign, the most significant could be potential deals for joint exploration of oil and natural gas in Siberia.

In an interview to the Hindustan Times, the Russian president said “we expect to secure ourselves the role of a reliable energy supplier to Asian markets.”

On its part, energy-starved India wants to diversify its oil suppliers, which mostly come from the Middle East.

Bharat Karnad, a strategic analyst with New Delhi’s Center for Policy Research, said Russia will seek investment from India.

“They [Russia] need commitments, especially on the oil, investments, increasing Indian oil investments. For Russia, energy sector is their economic driver there. These are the sort of things they are looking for to regain their lost confidence in New Delhi,” said Karnad.

Faced with Western-led sanctions, Russia is turning to Asia for more trade and investment.

And as they prepare for the summit, the allies from the Cold War days are both stressing their commitment to do more business and transform the relationship that has sagged in recent years.

Putin called India a “reliable and time tested partner.”

Indian officials underlined New Delhi’s commitment to its “long standing partner”.

Joint secretary in India’s foreign ministry, Ajay Bisaria, said bilateral trade at $10 billion is “far below potential,” and efforts will be made to increase it.

“India has said clearly it cannot be party to any economic sanctions against Russia. President Putin’s visit is a landmark event and is expected to provide a fresh impetus to the existing excellent bilateral relations between our countries,” said Bisaria.

New nuclear power plants to be built by Russia, an oil and gas pipeline between the two countries, the sale of Russian rough diamonds directly to India for cutting and polishing, and building advanced weapons will be on the agenda.

Observers say Russia is irked that India is increasingly turning to Western suppliers, including the United States, for its military equipment.

India is downplaying such concerns, saying Russia is also New Delhi's primary defense partner and will remain so for decades.

Putin said that the high level of “trust” allows the two countries to make the transition from selling weapons to joint development and production of advanced weapons systems.

Russia also sought to dispel Indian fears on a military cooperation pact Moscow inked with India’s arch-rival Pakistan last month. Russian Ambassador to New Delhi Alexander Kadakin said Moscow will never do anything to harm India’s security interests.

Commentators have noted that Putin's visit comes ahead of another high profile visit - that of President Barack Obama, who comes to India in January as the chief guest for the country’s Republic Day celebrations. That visit is seen is seen as a signal of efforts being made by Prime Minister Narendra Modi to improve ties with Washington.

Courtesy: Voice of America
Arun Jaitley again pokes RBI to cut interest rates
Photo: Live Mint
NEW DELHI, Dec 11, 2014: Finance minister Arun Jaitley on Wednesday made a strong nudge for interest rates to ease against the backdrop of moderating inflation and announced a compensation of Rs 11,000 crore to win over states for a nationwide rollout of the goods and services tax (GST). 

"If you bring down the rates, people will start borrowing from banks to pay for their flats and houses. The EMIs will go down. We are waiting to take the situation to that and I am sure that the authorities who are competent to deal with it are fully seized of this view notwithstanding the balancing exercise between inflation management and growth which they have to do," Jaitley said in the Lok Sabha. 

The Reserve Bank of India in its monetary policy review earlier this month had left interest rates unchanged, but indicated that it may ease early next year depending on the inflation situation.

Jaitley stressed the government is committed to sustaining a favourable climate for foreign investment through a "civilized" and "predictable" tax regime.

The minister was replying to a debate on supplementary demands for grants for an additional expenditure of over Rs 12,500 crore, out of which the cash outgo would be Rs 500 crore. The opposition had raised issues of failed promises, federalism and cut in social spending. The demand for grants was approved by the Lok Sabha. 

Jaitley also announced the release of Rs 11,000 crore to states in the current fiscal as part payment towards CST compensation to facilitate roll-out of the goods and services tax (GST), a day ahead of his meeting with state finance minister to iron-out contentious issues holding up rollout of the ambitious tax reform. The government hopes to resolve the issues for the eventual introduction of GST.

"I had committed to partial payment of the outstanding outstanding CST compensation will be released this year. I stand by this commitment given by me. Despite difficult and challenging situation, I proposed to release Rs 11,000 crore which is one-third this year as part payment of CST compensation to the states," he said. The FM said a major impediment in the implementation of GST was the trust deficit between states and the Centre over non-payment of CST compensation to states from 2010. 

"This will take care of the amount from 2010-11 onwards; the balance amount I shall start paying from the next financial year onwards when hopefully the situation would be better," the FM said.

Referring to the select committee report on further opening of insurance sector, Jaitley said, "Large investments are waiting to come in. We have to open the doors." The committee has suggested a composite foreign investment cap of 49% in the insurance sector, as against 26% FDI cap currently. 

The government would endeavour to usher in a "civilized tax policy" to attract overseas investments, he said, adding FDI regime has already been relaxed in the defence sector and has generated lot of interest from top global manufacturers. 

"The retrospective tax only brought bad name to the country without realizing any revenue. Ultimately it was struck down by the court. We want to have a predictable and civilized policy. We don't want to flex muscles unnecessarily," Jaitley said. 

He accused UPA of creating fiscal mess which resulted in NDA inheriting an economy with "a negative sentiment" where fiscal deficit had reached unmanageable proportions and forced borrowing leading to cut in planned expenditure. 

He said, thanks to falling crude prices, NDA had been able to control inflation and brought down fuel prices seven times. "If the trend continues fuel prices would be decreased further. Opposition had accused the government of not passing on the benefit of 40% drop in global crude prices since June to consumers. 

Arguing that a "very large investment" was waiting to come to India once limit for foreign investment is increased, Jaitley said, "How long are we going to remain a country which does not have adequate health insurances. Forget other forms of insurances LIC can take care of life insurances but you need to expand these sector ... public health system is not adequate. People are forced to sell their property for treatment. We should not oppose it just for the sake of ideology or dogma." 

Earlier, Congress MPs Veerappa Moily and Deepender Hooda along with TMC MP Saugata Roy accused the government of failing to deliver on its promises by not bringing in any radical reforms, failing to bring in black money, cutting social sector expenditure and diluting MGNREGA. 

Jaitley said it was myth that MGNREGA was being diluted and argued for remodelling of planning commission by pointing out that even Congress CMs were talking about cooperative federalism and decentralisation of economic control.

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India plans 5-fold increase in renewable energy
Photo: Bureau of Labour Statistics
December 8, 2014: India said Friday it was optimistic the world would reach an agreement to curb climate change, but said its actions would be focused on boosting its renewable power capacity five-fold rather than cutting carbon emissions.

With hundreds of millions still mired in poverty and without access to electricity, India cannot afford to reduce greenhouse gas emissions at the expense of economic growth, Environment Minister Prakash Javadekar said before leaving this weekend for U.N. climate talks in Lima, Peru.

"Our growth cannot be compromised," Javadekar said. "Poverty needs to be eradicated immediately. Poor people have aspirations. We must fulfill them. We must give them energy access. We cannot and nobody can question on this."

He said he was optimistic industrialized nations would agree to shoulder more of the burden to reduce greenhouse gas emissions, given that they had been polluting with fossil fuels for decades before developing nations.

"That is the just regime," he said.

The recent U.S.-China pact announcing new targets for fossil fuel use marked a positive step toward establishing this sort of equality, he said. In that pact, the U.S. said it would aim to bring down its per-capita emissions from about 20 tons while allowing China to raise its 8-9 tons per capita so that both reach a level of about 12 tons by 2030.

"They have accepted the differentiated responsibility and the need of time for growth," Javadekar said.

India pledged in 2009 to reduce its emissions intensity — how much carbon dioxide it produces divided by its GDP — rather than promising to cut overall emissions. Indian officials and scientists say it could easily cut emissions intensity by 20-25 percent below 2005 levels by 2020.

India's preference for the per-capita emissions calculation also ignores the fact that around 400 million Indians still have no access to electricity at all, while hundreds of millions more are lucky to get a couple of hours a day. Experts worry that as India's population continues to grow beyond 1.2 billion and more people become wealthy, its share of global emissions will skyrocket.

More than 60 percent of India's installed 250 gigawatt capacity today comes from burning coal. Javadekar confirmed India's coal-fired capacity would increase along with renewables.

He suggested this concern was secondary to its responsibility to pull its people up from poverty. "We are not going on the path of business as usual, which we are entitled to do, but we are not," he said.

Instead, India doubled its coal tax to 100 rupees per ton and will use the estimated $9.4 million generated for projects that would boost the country's solar power capacity to 100 gigawatts by 2020.

"It's a huge increase" from today's 20GW capacity, Javadekar said, noting the 80 GW increase would save the country from burning 50 million tons of coal a year. "It's a huge ambition. It's a real game changer ... and we will achieve it."

China also committed to increasing its share of renewable energy, which analysts said would send a positive signal for renewable power companies and developers to invest.

Courtesy: PennEnergy
MPs put pressure on Raghuram Rajan to cut rates
Photo: Economy Lead
11 Dec, 2014:  RBI Governor Raghuram Rajan on Wednesday faced calls from members of Parliament to cut interest rates, adding to pressure on the celebrated economist, who has emphasised the central bank's independence since assuming office in September 2013 and has steadfastly refused to cut rates till the battle against inflation had been squarely won. 

Finance Minister Arun Jaitley said he agreed with the call for lower rates but added that the final decision was for the monetary authority, the RBI, to take.

"I am grateful that he (Saugata Ray, TMC MP) agreed with me, that now time has come with moderate inflation to bring down the rates. If you bring down the rates, people will start borrowing from banks to pay for their flats and houses. The EMIs will go down," Jaitley said. 

"I am sure that the authorities who are competent to deal with it are fully seized of this view notwithstanding the balancing exercise between inflation management and growth which they have to do," he added.

The FM has in the recent past often emphasised the need for a lower cost of capital but has always added the caveat that the final decision was up to RBI. Jaitley, who was replying to the debate on supplementary demand for grants in the Lok Sabha, was responding to comments by Ray and Congress leader Veerappa Moily charged that the government was insensitive to the problems of agriculturalists, industry and the manufacturing sector.

"In spite of (WPI) inflation easing to 2.82 per cent so far, interest rates have not been cut. There has been no spurt in manufacturing activity. I suppose, Mr Jaitley is helpless in the face of an economist governor of the Reserve Bank of India," Ray had said in his intervention. 

Moily also spoke in the same vein. "So far as interest rates are concerned, now it has become mature to reduce the interest rates. You agree that you have given statements in a number of places. Even the RBI governor agrees that it deserves it. Japan has done it and has reduced the interest rate. China has reduced the interest rate. Everybody has done it. But you refused to do that," he said.

RBI held interest rates steady in its mid-quarterly monetary policy review on December 2. While this outcome was widely expected by the market, some government officials had privately called for a cut in rates on the ground that wholesale inflation was below 3 per cent while retail inflation is below RBI's target of 6 per cent by January 2016. Further, GDP growth in the second quarter decelerated to 5.3 per cent from 5.7 per cent in the previous quarter.

Retail Inflation Likely Fell to Record Low in November
[Editor: This implies that the RBI might go for a Repo rate cut before the scheduled. The traders can start picking up rate sensitive stocks and also thee shares of those companies, which have high debts on their books. It is because these companies, might replace their high cost debts with low cost ones]
December 10, 2014: Bengaluru: Indian consumer inflation probably fell to a record low in November, dragged down by falling food and fuel prices, while growth in core industries nudged factory output up in October, a Reuters poll showed.

The latest survey of 36 economists forecast that retail inflation cooled to an annual rate of 4.50 percent from October's 5.52 per cent.

That would make it the lowest since the government started releasing the data in 2012. Official retail inflation data will be released on Friday.

Wholesale price inflation was forecast to slow to 1.41 per cent in November from 1.77 per cent in October, making a new five-year low. The data will be released on December 15.

"Continued steep declines in food and fuel prices, as well as subdued core pressures, mean that consumer price inflation is likely to have dropped to a record low in November," wrote Shilan Shah, Capital Economics' India economist, in a note.

While expecting some acceleration in inflation during coming months, partly due to the unwinding of a favourable base effect, the Reserve Bank of India raised hopes at a policy review last week that it would cut interest rates once it becomes more sure that inflationary pressures are waning.

The Reuters poll also forecast that production at India's factories, mines and utilities rose an annual 2.80 per cent in October compared to 2.50 per cent in September.

Data last week showed annual infrastructure output, which accounts for more than a third of overall factory production, accelerated to a four-month high of 6.3 per cent in October.

The uptrend in industrial production will probably continue, according to a private survey earlier this month which showed strong demand meant factory activity expanded at its fastest pace in nearly two years in November.

The positive data suggests the economy may be gaining momentum after losing some steam in the July-September quarter.

"A recovery is certainly underway. Its sustainability depends critically on the continued efforts by the government to resolve the issues surrounding stalled projects," said Rupa Rege Nitsure, chief economist at Bank of Baroda.

Courtesy: NDTV Profit