T20 3rd May - 2011

Global Markets

1. S&P 500 gains on the back of good earnings report which eased fears regarding slowdown of economic growth. SP Chart

2. US Dollar: weakens further as US manufacturing declines in April, 2011. US Dollar Chart

3. Crude prices touching new highs after witnessing an escalation of Libyan crisis. Crude Oil Chart

4. Gold prices driven mainly by concerns on rising inflation. Gold Chart

Economy

5. The index of six core infrastructure industries has registered a growth of 7.4% of annual growth in March as compared to 6.8% for the same period last year. This growth is due to higher crude petroleum and steel production.

6. Exports grew by 37.6% in FY11 to end at $ 245.9 Billion easily surpassing the government’s yearly target of $ 200 billion. Asia, Latin America and Africa were the main contributors to this growth. Exports growth is expected to cross $ 300 Bn in FY12.

7. In a bid to check inflation the Reserve Bank of India (RBI) raised short term lending (REPO) rates by 50 bsp to 7.25% and reverse repo rates by 50 bsp to 6.25%. They also lowered India’s growth projection to 8 percent for the current fiscal.

8. The Reserve Bank of India (RBI) has indicated that India’s current account deficit could widen this fiscal because of spike in global oil prices. Oil constitutes one third of India’s total imports.

9. Inflation could come down to 7.78% this month on the back on a good monsoon and an increase in area under Rabi crops. March inflation stood at 8.98% and inflation for the country has been above 8% since Feb, 2011.

10. India's manufacturing growth picked up in April, 2011 it rose for the 25th consecutive month in April and at their strongest pace since November, 2010. The PMI rose to 58.0 from 57.9 in March. On the other hand China’s PMI fell to 52.9 in April from 53.4 in March.

Indian Markets

11. Nifty experiencing negative movements in response to interest rate hike by RBI. Nifty Chart

12. FIIs purchased shares worth a net Rs. 6,560.2 cr during April, 2011; Domestic funds bought shares worth a net Rs 62,496.6 cr for the same period.

Sector

13. Auto parts sector are concerned about shrinking profit margins despite witnessing a growth of 28% in FY11. The industry is grappling with rise in commodity prices and a withdrawal of Duty Entitlement Passbook (DEPB) which may affect exports of auto parts as it will make Indian auto parts uncompetitive in global markets.

14. State run oil refineries are in dire straits as they are losing Rs. 465 crore daily on account of selling diesel, kerosene and cooking gas a state fixed cheaper rates. At the moment state oil cos are losing a little more than Rs 8 per litre of petrol.

15. An opportunity has risen as Smaller; specialised software services firms are likely to see better pricing in FY12 as demand for the services they offer rises. Companies such as Hexaware, KPIT Cummins Infosystems, Persistent Systems and Polaris Software Lab are expected to see some improvement in pricing in the current fiscal.

16. Reliance group is in talks to buy the stake held by Bharti Enterprises in an Indian insurer joint venture with AXA Group. This highlights RIL’s keenness to enter the insurance business. Bharti AXA is a joint venture between Bharti Enterprises and AXA, Europe's second biggest insurer.

Stocks

17. Indian overseas Bank announced a Q4 net profit of Rs 434 crore a 241.7% growth as compared to 127 crore profit in Q4, FY10. Indian Overseas Bank Chart

18. Godrej consumer products Q4 profit up 54% at Rs 142 cr. Godrej Chart

19. Marico Q4 net profit up 40% at Rs 71.6 cr. Marico Chart

Quotes

20. “The art is not in making money, but in keeping it." - Proverb