Friday, December 28, 2012

Performance of blue chip stocks in 2012!

So, which is the blue chip gainer for the year 2012 in the Indian stock market? It is perceptibly Tata Motors. Deemed the best stocks of 2012, Tata Motors stocks exceeded market expectations in price rise. Thanks to hopes of its luxury unit Jaguar Land Rover of exhibiting a turnaround in its performance!

Amongst the worst of performers in blue chip Stocks 2012, is Infosys Ltd. Continual apprehensions about global demand for software services have led to the fall of these IT stocks. Among the various sectors, lenders performed the best followed by real estate and FMCG. The banking index of the BSE  Sensex went up by 57 percent. ICICI gained 60 plus percent while HDFC Bank rose more than 50 percent. Equal gainers in this category include L&T and Maruti at 60 percent plus and Sun Pharma at 50 percent plus.

The RBI, after a 50 basis points rate cut in April, may further cut the repo rate more firmly next year.

Tuesday, December 18, 2012

Repo rate hold by the RBI!

RBI’s holding of the repo rate is no big surprise as it was already reported that a rate cut was ‘highly improbable’ though India's main inflation gauge WPI rose 7.24 percent from a year earlier against the expectations of 7.6 percent. Of course, a rate cut of 8 percent is possible in January and leading international economists forecast a series of rate cuts in 2013 and this will definitely show gains in the BSE Banking Index. Thanks to possible easing of inflation in the next few months!

The RBI kept interest rates on hold though the government put pressure on the central bank to reduce borrowing costs. The bank assured of a rate cut in January and shifted focus towards enhancing a flagging Indian economy. BSE Banking Index at NSE went up with both the sensex and nifty trending at a moderate rate.

One of the reasons for the RBI holding the repo rate was the low GDP growth (below 6 percent) posted for the past three quarters.

Friday, December 14, 2012

The WPI Data and Possible After-Effects

Just the utterance of the topic ‘inflation’ will transport you to a world of apprehension in the context of economy. A high inflation rate has no wonder affected the Indian economy to a great extent for several months. The report is now somewhat otherwise.

Recently with India's main inflation gauge WPI (wholesale price index) rising 7.24 percent from a year earlier against the expectations of 7.6 percent, the Indian economy may be escaping a long period of price pressure. A rate cut by the Reserve Bank of India (RBI) is possible in the New Year month. The RBI’s policy meet on December 18 may not see a rate cut but an 8 percent cut is possible in January as per market experts.

It is in 10 months in November that the WPI cooled to its weediest pace. According to a leading economist, India’s inflation will drop below 6 percent next year. A chain of rate cuts is then possible.

Thursday, December 6, 2012

Unpredictable Nifty's U-Turn!

With UPA winning the FDI vote in Lok Sabha, stock market experts and traders had predicted that Nifty should breach the 6000 level on Thursday December 6. However, Nifty took a U-Turn and opened 43 points low in the opening trade at 5857.

IT shares and profit booking were the main reasons hurting the Market; Infosys, TCS pulled market down after their shares fell 2.1% and 2% respectively. Shares of retail firms Pantaloon and Shopper's stop gained in the early trading session to fall later. Pantaloon had gained substantially after the Bill to allow FDI in retail was passed and it was the top traded stock in early trade.

Market stayed volatile through the day with Nifty hovering below 5870 mark. Experts had expected Nifty to scale up as the Govt's win indicates a boost to the reforms and market sentiment. Despite given political positivity, Nifty failed to scale up and once again proved that Nifty is Unpredictable and  a trader should take Market volatility in stride!

Tuesday, December 4, 2012

Moody’s outlook for the Indian banking system and BSE Banking Index!

Banks’ profits are likely under pressure over the next 12 to 18 months. Yes, the Indian banking system, as projected by the rating agency Moody’s, would remain in the negative owing to a challenging operating environment. The negative atmosphere follows from a blend of weak local currency, high inflation, high interest rates, and of course slow economic growth! It is the slowest growth in a decade that is being witnessed for the fiscal year that ends in March 2013. In the September quarter, the Indian economy grew by 5.3 percent.

Moody's representative pointed that the negativity of the situation of the Indian banking system may further lead to a further worsening in asset quality, fall in profitability, and an increase in provisioning costs. Thanks to the decision by the government of injecting additional capital into the state banks within the next few weeks; but the injection would not exceed the Rs.150 billion mark.

Moody's rating did not show any major impact on the BSE Banking index. Infact, SBI shares were up by 2% in the morning session, trading near INR2239/- The capital infusion news by the Finance Minister has given a spur to the Banking Index. The government is likely to take decision on the capitual infusion this week, however it will be restricted to the 150 billion rupees mark as suggested in the fiscal budget 2013.

Monday, November 26, 2012

Metal Players of the India Stock Market!

Steel Authority of India (SAIL) is an India-based steel making company that has five integrated steel plants and three alloy steel plants. Despite a 12 per cent increase in the quarterly profit, Steel India NSE has missed expectations with lower sales.

Steel Authority of India has reported a drop in the net sales to 106.63 billion rupees as compared to a year earlier. The low operating margins have been attributed to increase in the fuel costs, increase in other expenses, and higher wage expenses. In contrast to the estimated net profit of 7.3 billion rupees for the quarter ending September, SAIL has said that the net profit rose to 5.43 billion rupees.

Another player in the metals market is Sterlite Industries India Ltd, which is a non-ferrous and mining company that operates in three segments; Phosphoric acid, copper, and other business segment. India’s Sterlite NSE plans to raise 5 billion rupees by a bond issued at 9.40 percent. The Indian metal producer will issue 10-year bonds, available at Axis Bank, with an option to end after a period of 5 years.

Thursday, November 22, 2012

ICICI Bank and IDFC on NSE performance statistics

Markets are favorable today for bank and realty stocks in the morning trade (22 November); thanks to reform hopes. The positive domestic opening of the indices of the Indian bourses is also triggered by improved Asian cues. With the winter session of the Parliament to begin today, investors are waiting for some optimistic news that would boost economic growth. Not all banking companies are in the uptrend. ICICI Bank on NSE saw its shares falling while IDFC on NSE was in an upbeat momentum. 

At 10:43 am, price of ICICI Bank NSE stocks was Rs. 1044, which was down 0.45 or .04 percent. Volume of shares traded was 453,209. While the previous close was at Rs. 1044.45, it opened at Rs. 1045.50. Difference noticed between bid and offer price of ICICI Bank NSE stocks was by .05 paise at Rs. 1043.95 for 10 and Rs. 1044 for 149 respectively.

IDFC NSE stock was priced at Rs. 102.25, which was up Re. 1.00 or +0.99 percent. Volume of shares traded was 545,007. The previous close saw its price closing at Rs. 101.25; it opened at Rs. 101.05. The difference noticed between bid and offer price of the stocks was by 0.05 paise.

Wednesday, November 21, 2012

Cairn India and Cipla on NSE

As the day advances, stock market results change too either in the positive or negative. The early morning trade saw both the sensex and nifty exhibiting a lackluster trend and by pre-noon caught the uptrend momentum. At 11.37 a.m., the sensex was up 86.67 points at 18,415.99 while the nifty was up 23.50 points at 5595.05. Cause of the uptrend is a blend of firming Asian markets and gains in stocks of IT, oil and gas, and metal sectors.

Though oil stocks gained on an average, Cairn India NSE could not catch the momentum. The company’s shares went down by 1.07 per cent at 11.41 am, i.e down Rs. 3.55 to be perched at Rs. 328.10. The previous close price of Cairn India NSE stocks was Rs. 331.65 and it opened at Rs. 332. A difference of 0.10 paise was noticed in the bid and offer price at Rs. 328.00 for 100 and 328.10 for 18 respectively.

The pharmaceutical sector showed mixed results with Cipla on NSE perched at Rs. 386.50 at 12:10 pm, up Rs. 6.65 or +1.75 percent. Volume of shares traded was 1,159,957. While the previous close was Rs. 379.85, it opened at Rs. 380. The difference between bid and offer price of Cipla NSE shares was 0.15 paise.

Tuesday, November 20, 2012

TCS and Tata Motors on NSE

Can you expect the stock market to be bullish everyday? Such a situation would never occur. Bearish and bullish trends are but humdrum affairs in any stock market. As of November 20 market statistics, the nifty moved up marginally by 0.15 points while the sensex ended losing 10 points. But amid the volatility, Tata Consultancy Services on NSE and Tata Motors on NSE exhibited a bullish trend with buyers driving the price of these shares higher.

Volume of shares of Tata Consultancy Services NSE traded was 628,020. At 17:00 hours, the price was at Rs. 1272.80. It rose by Rs 10.45 or +0.83 percent. Previously the price closed at Rs. 1262.35 and it opened at Rs. 1275. The bid price was Rs. 1272.80 for 11794 shares. The day’s low and high prices were Rs. 1256.05 and Rs. 1282.90 respectively. According to the 52 week price change dynamics, the lowest witnessed was Rs. 1041 and the highest Rs. 1439.80.

Price of share of Tata Motors NSE was Rs. 266.10, up Rs. 2 or +0.76 percent. Volume of shares traded was 6,864,096. While the previous close was Rs. 264.10, it opened at Rs. 268.05. The day’s low and high price tags were Rs. 261.70 and 270.35 respectively.

Monday, November 19, 2012

Bharti Airtel soaring high on the spectrum!

The stock price of Bharti Airtel rose almost 2.3% as brokerage firms recommend buy for India's number one telecom service provider. Bharti airtel stocks have gained in the choppy market where other stocks have majorly lackluster.
Bharti shares have so far in the month of November gained 15% and last week proved to it's best inning since september as it's shares surged 9.3% after the 2G Spectrum auction failed to get buyers at the anticipated costs. As on Monday 19th November, the stock has hit a low of INR302.5 and an intraday high of INR311.1

Bharti Airtel definitely seems to be wooing traders after agencies like Credit Suisse and Goldman Sachs upgraded Bharti Airtel from 'underperform' to 'outperform' and from 'neutral' to 'buy' respectively. Both brokerage agencies opine that regulatory risk is reduced in case of Bharti Airtel and the potential of tariff hike is high with reduced competition on the domestic front as telecom operators are focusing on reducing losses.

Friday, November 2, 2012

Wipro’s Q2 Profit Rose to 24% Beating the Estimates

The profit for Wipro, ranked as India’s no. 3 software service provider, rose to 24 per cent at 16.11 billion rupees, which has exceeded the estimates by analysts. In view of the trend, the forecast for the company’s revenue would rise to 1.3-3.2 per cent for quarter ending December.
Wipro has added 53 new clients for the IT services during the second quarter of fiscal year. A year earlier, the Q2 revenue of the software tycoon rose to 17 per cent at 106.57 billion rupees.
Wipro Ltd has stated that all its non-IT services will be folded to a new firm focusing on outsourcing. This will include the company’s medical diagnostics and consumer care services as well. The step is taken in an effort to promote growth in view of competition from local and global rivals. In order to speed up the growth amongst peers, Wipro’s chairman Azim Premji also replaced company’s two co-CEOs.

Monday, October 29, 2012

Potential Gains indicated for RIL with Appointment of New Oil Minister

Veerappa Moily has replaced Jaipal Reddy, the ex oil minister as a part of the recent reshuffle of cabinet unveiled on Sunday. Mr. Moily promises to make an efficient effort to encourage foreign investment in addition to pushing Indian oil companies to assertively bid for foreign oil and gas to cover up the growing demands of energy.
Reliance Industries, controlled by Mukesh Ambani, had clashes with ex oil minister over the issues related to gas production at its KG-D6 block in Andhra Pradesh. Reliance Industries Ltd. along with its partner Bharat Petroleum sought a hike in the prices of gas to cope with the rising expenditure to develop the block. Mr. Moily has promised to take quick and detailed decision though he has declined to address the matter specifically.
The shares of Reliance Industries Ltd. rose, with the appointment of new oil minister, to nearly 2 per cent in view of the potential improvement in the relationship between government and RIL.

Thursday, October 25, 2012

Mukesh Ambani - Reliance Industries Ltd - Tops the Forbes List!

Mukesh Ambani, chairman of Reliance Industries Ltd, with a wealth of $21 million, has emerged as India’s richest man for the fifth consecutive year, according to Forbes India annual rich list. Lakshmi Mittal has been ranked second despite the loss of $3 million in net worth since last year. Dilip Shanghavi, chairman of India’s biggest drugmaker Sun Pharmaceuticals Ltd., has been the biggest climber with an entry in top five.

Mr. Ambani has maintained the position despite the loss of 7 per cent market value by Reliance Industries Ltd. Mukesh Ambani of RIL has beaten steel tycoon Lakshmi Narayan Mittal and technology czar Azim Premji to top the list.

The 100 richest Indians saw an overall fall of worth which is 20 per cent to $241 billion in one year. The Forbes list consisted of 57 billionaires. According to Forbes, the collective wealth of India’s 100 richest people rose to $250, which is an increase of 3.7 per cent.

The Reliance Industries Ltd shares have been trending fair in the highly volatile share market.

Friday, October 12, 2012

Infosys - A series of disappointing qtrly results!

Can you expect India’s IT bellwether performing below expectations? Not always! In a volatile market, both big and small companies move according to the tide. But Infosys disappointed investors on October 12 when its shares went down below expectations, i.e. by almost 9 percent. The software services provider, which has been in the good books of investors for years together, has been delivering since January this year, a sequence of disappointing growth targets.

What Infosys Q2 results forecasted about its estimated growth rate at 8-10 percent was soon cut to 5 percent, surprising analysts and investors alike. No wonder the firm lost market shares to TCS, its local rival after reporting for the quarter ended September 30, weaker-than-expected operating margins. As per internal statistics in terms of client addition, Infosys exhibited its slowest pace of addition in six quarters, adding only 39 clients in the latest quarter. But a positive atmosphere still prevails!

Wednesday, October 10, 2012

S&P warning, slashing car industry... what's in store India Inc.?

Economic reforms have no wonder provided respite to India’s downgrading economy. The couple of reforms introduced in September saw both the indices of the Indian bourses exhibiting a positive uptrend momentum. But Standard & Poor rating agency’s warnings seem to dampen the spirits of investors. According to the credit rating agency, within the next two years, India still faced a one-in-three chance of a credit rating downgrade. The warning will turn true if the bad political climate further worsens, if fiscal reforms are sluggishly implemented, if external position declines, and if growth prospects go dim.

To add to the downgrade scenario is the once-booming car industry growing just 1 percent to 3 percent in the current fiscal year. In March 2011 fiscal, India saw car sales growing more than 20 percent. Slow economic growth rate and high interest rates are the principal causes of the slashed car sales growth. Until the economy comes back to momentum, this slashing trend may well continue.

Monday, October 8, 2012

DLF Ltd. shares drop on accusations by Kejriwal!

Scams and accusations do have their negative impacts on stock performances. DLF shares dropping after anti corruption activists Kejriwal and Prashant Bhushan accused DLF for improper dealings with Robert Vadra the son-in-law of the high-flying politician family, Smt. Sonia Gandhi, well corroborates the fact.

As of October 8, in the morning trade at 10 am, DLF Ltd. shares dropped by 3.8 percent. The dropping momentum continued with shares further dropping to 5.08 percent, i.e. by Rs. 12.30 at 11.30 am. This is against a backdrop of both the indices of the Indian bourses - sensex and nifty falling moderately.

DLF denied the allegations and claims made by the India Against Corruption team, saying its business relationship, as has been its practice for all of its business activities, is transparent and adhere to the highest standards of ethics. Robert Vadra countered the accusations too deeming it ‘utterly false, entirely baseless and defamatory’. It is to wait and watch what future has in store for DLF and Robert Vadra!

Thursday, October 4, 2012

Sensex Hits 19K mark - Thanks to Government Reforms!

Market analysts and investors are all cheers; thanks to the rising sensex and nifty at a hypersonic pace. It is all because of implementation of reforms that has seen the sensex and nifty recovering fast. If such an uptrend pace prevails, in no time will markets regain the highest points ever gained months ago. Hopes of additional fiscal and economic reforms by the government have set the ball rolling.

To add to the upbeat market trend is the rupee hitting the five and half month high. This is again a result of possible announcement by the government of reforms measures. Opening the pension sector to foreign investors and raising cap on foreign direct investment in insurance firms are the boosting factors. These bills are all set to be approved by the Cabinet. And once they are approved, further rise of the rupee, sensex, and the nifty is expected. Hope to see some more reforms introduced in the near future by the government to revive the falling economy of India Inc.

Friday, September 28, 2012

BSE sensex, nifty, and the rupee uptrend!

The Friday NSE nifty and BSE sensex performance saw a boost amid much anticipation. Thanks to global influence! Hopes of implementation of economic reforms in Spain for managing of debt imbalances have led to this uptrend. It was the IT market that showed the highest price rise dynamics, given the fact about Spain outsourcing IT services from India. While the BSE sensex rose 183.24 points to close at 18,762.74, the nifty added 53.80 points climbing to the 5,700 level.

Markets also showed a positive upbeat with the rupee rising to a near five-month high on Friday (28 September). Thanks to improvement of global risks sentiment. Further signs of economic discipline are being shown as a result of the same with the government sticking to its original borrowing plan. An amount of 2 trillion rupees is estimated to be borrowed for October-March. Fast tracking of fiscal and economic reforms by the government has indeed increased the value of the rupee.

Tuesday, September 25, 2012

Investment by Oil Companies in Canada

It is not only FDI inflows in India but also in other countries that is noticed at large. And Indian companies are well taking advantage of the opportunities. Three state controlled oil companies are all geared up to invest in Canadian energy resources.

 A bid amounting to $5 billion has been made by Oil Natural Gas Corp, Oil India Ltd, and Indian Oil Corp for stakes in Canadian oil sands assets owned by ConocoPhillips. These Indian companies would be the first to invest in Canada’s energy resources. ConocoPhillips happens to produce 12,000 barrels of oil a day. And 30 billion barrels (approximate) of bitumen goes into the production of such a huge figure!

To meet 80 percent of its demand for oil, India imports oil from abroad. And the demand is only rising. Such investment ventures in oil assets abroad will at least help the country to meet this growing demand.

Monday, September 24, 2012

Power Bailout, A Temporary Relief!

Power black out incidences are often reported in most regions of the country with the worst being noticed in July when 670 million people were affected for two consecutive days. Most of the state-owned Power Distribution Units are incurring big losses and reforms from the government can bring rays of relief. ‘Something is better than nothing’ goes the saying. At least the government’s measures to offer a bailout to the cash-strapped power distributors would provide temporary relief.

This is no reform but mere restructure. According to analysts, long term energy problems will not be resolved and problems will only add up. $35 plus billion in debt will get restructured with this measure. This has triggered the boost in price of power shares by 2-3 percent in the Indian bourses (24th September).

Under this bailout plan, provincial governments can look forward towards taking on half of their short-term debt and translate them into long-term bonds.

Friday, September 14, 2012

Biggest stock market rise since July 2011

It is a big surprise for investors of the Indian stock market with both the indices of the Indian bourses exhibiting the highest figures since July 2011 besides gaining for the eighth consecutive session. While nifty advanced 142 points to 5,578, sensex rose 443 points to close at 18,464.27 (September 14).

Several factors triggered the rise, the immediate effect being generated by the diesel price hike by the UPA government. Another major contributor was the monetary stimulus (new asset purchase program) of the Federal Reserve; its decision to launch a third round of quantitative easing (Q3) not only boosted Indian market sentiments but also worldwide.

Besides, to curb inflation, the Reserve Bank is expected to leave interest rates on hold. Due to deficient monsoon, food prices rose high this year, which further added to the inflation of 7.55 percent in August 2012.    

Amongst the biggest gainers in blue chip stocks were Reliance Industries and ICICI Bank. 

Thursday, September 13, 2012

Federal QE3 Announcement Expected Tonight!

The indices of the Indian bourses are trending up consecutively, though moderately. This upbeat sentiment has been witnessed ever since the announcement by European Central Bank on the unlimited sovereign bond buying decision, and the German Constitutional Court's nod y for the same. Another trigger is underway. Market experts feel that during the two-day meeting of the U.S. Federal Open Market Committee (FOMC), a third round of quantitative easing (QE3) may be announced.

Such a measure would indeed boost market sentiments and the figures of the Indian indices may go up further. It is but a fact that these are temporary triggers which do not last long. Scams, lack of policy-making and implementation, inflation, price hikes, etc. are the key depressants of the volatile Indian market. At least announcement of QE3 may shoot nifty up closer to 5550-5600 levels. ‘Short term gain for a long term pain’ – the statement well describes the QE3 state of affairs!

Wednesday, September 12, 2012

Downtrend of Siemens India NSE Stocks

The July IIP data did not meet market expectations, but surprisingly it did not affect trading sentiments. At 11.51 a.m. (12 September), sensex was perched at 17,941.31, up 88.36 points and nifty at 5,411.35 up 21.35 points. But positive market sentiments have not favored Siemens India NSE stocks. For every downtrend, there is a reason behind in addition to market volatility. Against the backdrop of the uptrend indices, why Siemens India NSE stocks fell was because of the German conglomerate selling a 1.2 percent stake in a deal that could raise for it an amount of up to $ 50 million.

At 12.35 pm, the stock price fell by 2.79 percent or down Rs. 19.50, i.e. it was perched at Rs. 678.50. Whether the price of Siemens India NSE stocks will further fall or rise all depends on the investors buying and selling them during the trading hours throughout the day

Monday, September 3, 2012

Steel companies Gain as SC orders lifting ban on 18 Iron Ore mines!

It is a big sigh of relief for miners in Karnataka. Thanks to the Supreme Court lifting ban on 18 iron ore mines. After a year of interruption on environment concerns, miners in Karnataka can now resume mining. Annual addition to the production capacity would now be a mind boggling 5 million tonnes. But then arises a concern of the increased capacity of affecting dwindling global iron ore prices!

Unless the raw materials are shipped overseas by exporters, the price factor would be affected. Why shipments are not feasible are because of excessive freight rates and 30 percent export tax. Nevertheless, India happens to be the world’s third largest exporter of iron ore output, exporting around100 million tonnes a year. Clamping of illegal mining has led to slumping of overseas sales.

The lifting of this ban from 18 iron ore mines is the gateway to the lifting of more bans giving scope for the gradual opening of other category mines. 

Spot iron ore prices are already down about 40% this year due to China's cut in demand. However, this cut in demand of iron ore is blessing for Steel companies as the extra output from iron ore mines can be used by Steel mills. As soon as the news was out, Sesa Goa Ltd NSE showed an uptrend cheering traders!

Friday, August 31, 2012

Languishing GDP growth!

It is no surprise to learn that in the quarter ending June, the GDP growth of India got weaker, exhibiting its lowest in three years, at 5.5 percent. With this exposure, there seems to be no respite for Prime Minister Manmohan Singh. The economic agenda that he created is no wonder paralyzed owing to a series of political scandals. And the coal scandal exposed by CAG has added fuel to the fire. As he is trying to escape those scandals, the GDP report for June Qtr acted as an eye-opener, hitting him worse!

Exports have been hit due to weak demand in the West. But such fluctuations do occur. It is lack of government reforms and overspending that has affected greatly the GDP growth. Investors hoped that the weak GDP growth would influence the RBI to lower interest rates at its next policy meeting to be held on September 17. But again the stubbornly high inflation has come on the way!

After the GDP data report, sensex recovered to about 80 points from it's lowest point of the day and Nifty too improved by 25 points from it's lowest point. However, due to fall in ICICI bank shares, sensex fell by 0.92% and nifty fell by 1.1%.

Tuesday, August 28, 2012

Jindal Steel and Power Ltd hits its 3 years low!

The after effects of CAG report are putting many stocks on rout. Jindal Steel and Power is one of them and its shares have hit a 3 years low today. The NSE shares touched a low of Rs.358.85/- and closed at Rs.359.15/-

Jindal Steel and Power Ltd NSE shares had fall 6.5% today hitting it's earlier lowest, of previous two sessions, since May 2009. It’s 3rd day in a row that Jindal shares have slumped. It seems investors are holding to invest in companies who have been named in the Comptroller and Audit General report which was published earlier this month on August 17.

Not only Jindal, but the entire metal index got slashed today. Another reason for the dip accounts to the slowing demand due to low growth rate.

Friday, August 24, 2012

Price rally affecting Indian gold imports!

Revelation by delegates at a major conference on August 24 about Indian gold imports to fall further this year holds much ground. According to reports by the World Gold Council, it fell to 131 tonnes or 56 percent in the second quarter. The fall is all because of global gold prices being driven higher by the weaker dollar and surplus cash in the market. Prices of gold have more than doubled since 2008, restraining purchases from price-sensitive Indian buyers.

As of August 24 statistics, gold prices, exhibited its biggest weekly rise, an uptrend by 3 percent since early June. No wonder demand in China for gold is increasing; this may trigger gold market to peak at $1,800-$1,850 an ounce by the end of this year. Gold is seen by the government as a dead asset, hence encouragement to the masses to spend on other Indian goods and consume things in India.

Wednesday, August 22, 2012

Market trends and Bharti Airtel’s lowest close

Talks by the government of disinvestment and fuel subsidies may to some extent lead to improvement of the Indian economy. Decisions are delaying but a ray of hope persists amongst market investors.

On the 22nd of August, the share market fell, snapping the previous two-day rise. Whatever uptrend was witnessed in the India stock market since July was majorly contributed by foreign liquidity flows amounting to around $3 billion. And this has happened even without the government announcing any fiscal reforms.

You can well imagine the positive consequences when fiscal measures get announced by the government! Amid the market players that were a puppet of volatility, one of the biggest losses was faced by Bharti Airtel Ltd. NSE shares, the shares of which fell 3.8 percent to their lowest close (22nd August) since Oct. 2006. News about the potential entry into voice and data segments by Reliance Infotel, a unit of Reliance Industries, has led to Airtel shares downtrend.

Friday, August 17, 2012

After-effects of CAG reports!

CAG reports are creating headlines and it would no wonder affect India’s already volatile stock market. The reports reveal losses amounting to billions of dollars being incurred. The government was accused for the losses.

These reports were on three sectors, viz. coal, power, and aviation. Coal blocks, Delhi's flagship airport, and power projects were allocated at a fraction of market prices, which cost the exchequer tens of billions of dollars in lost proceeds. Developers got the airport land at a tenth of its market value, thus gaining an undue profit of $4.3 billion. Had the allocation happened wisely, results would have been otherwise in the CAG report.

It is now the PM’s turn to receive a blow of negative criticism and the opposition is already seeking answer from the PM, even demanding his resignation, as he was linked to the coal allocation in favor of private companies. It is to wait and watch the effect of the CAG reports! But the effect on the India stock market was evident with the falling share price of those named by the CAG!

Tuesday, August 14, 2012

Reliance Power Ltd posts 23% Rise in Net Profit

Reliance Power Ltd has posted a rise in net profit to 2.40 billion rupees from 1.96 billion rupees in April-June. The company has revealed that its sales have doubled at 11.36 billion rupees. This is in line with the expectations of analysts. The company operates at 1,540 MW capacity and is all set to triple its capacity to 5,000 MW by the end of 2012.

Despite a good show up of Reliance Power Qtly results, two giant projects of the company have been stalled, due to the scarcity of cheap fuel. The company will hold a news conference on Tuesday to talk specifically about these projects. The scarcity of cheap fuel has prompted many power plants in the country to run below the capacity. This led to world’s worst blackout a fortnight ago which affected half of the Indian population.

In order to meet the shortage of fuel, Reliance Power has been lobbying the government to import gas. Reliance Power, controlled by billionaire Anil Ambani, is caught in a legal dispute with government of four states over the issue of $3.2 billion power project in southern state of Andhra Pardesh.

The shares of Reliance Power Ltd. NSE closed at INR93.15 and saw a high of 1.8% by reaching  INR93.90 share value. Reliance Power has proven worthwhile to its shareholders and traders.