How Election Results can affect Stock Market movements - a guest post

Recent results of elections in four states and one union territory threw up some interesting outcomes. Congress and its various alliances got a drubbing in all four states, though they managed to retain Puducherry.

BJP and its allies won Assam - opening their account in a North-Eastern state for the first time ever. They managed to marginally increase their seat share in West Bengal, and played spoilsport for the Left-Congress alliance in several more seats.

The strength of Congress in the Rajya Sabha will get reduced. In this month's guest post, Nishit explains why the results may be beneficial for the stock market and how results of state elections in 2017 can affect the market.

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Election results for four State Assemblies and one Union territory have been declared. Election results often influence the stock market because Government policies play a big role in the progress of the economy and as a consequence of which the market reacts.

In 2004, it was the fear of change, when the well entrenched NDA Government of Vajpayee was uprooted, and the market tanked. In 2009, it was relief that Manmohan Singh was back and would no longer require support from Communists. Similarly, in 2014, the Modi wave drove the market up.

Assembly polls do influence the market because they throw markers to the future. BJP consolidated its position during the recent state elections, and hence the market did not tank. If Assam was not won, then the market may have cracked.

There are no elections scheduled for the Assembly till about March 2017. At that point of time, the key states of UP, Punjab and Uttarakhand would be going to the polls. If BJP does badly, the market will tank and vice versa.

Election results are one of the influencing factors for the way the market moves and one must keep an eye on them. Market movements are merely effects and the underlying causes are many. An effective study of causes why the market moves as it does will help one make money.

The market rallied after state election results on May 19 '16 because Mamata Banerjee made the statement of supporting the GST Bill after results were out. The results also mean that in due course, Congress will be further weakened in the Rajya Sabha - enabling the NDA to pass important bills more easily.

Next year there will be two occasions when the market may get influenced by election results. In March 2017 with UP and Punjab and in late 2017 when Gujarat and Goa go to the polls. Imagine the scene should BJP lose in Gujarat!

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(Nishit Vadhavkar is a Quality Manager working at an IT MNC. Deciphering economics, equity markets and piercing the jargon to make it understandable to all is his passion. "We work hard for our money, our money should work even harder for us" is his motto.

Nishit blogs at Money Manthan. You can reach him at nish.stockid@gmail.com)

1:1 Bonus announcement by Reliance Industries - is it good news for investors?

Reliance Industries made the bonus announcement after the Indian stock markets closed for trading on Oct 7 '09. Today (Oct 8 '09), the stock closed up by less than 1% at 2120 - still more than 15% below its high of 2490 on May 19 '09.

A 1:1 bonus - particularly when announced after 12 years in the midst of a strong bull rally - should have elicited joy and buying euphoria among market participants. Why? Because bonus shares are considered to be beneficial to shareholders. From Reliance, the 'gift' should have appeared an extra special one.

In reality, it should make no difference to a shareholder's wealth. No doubt bonus issues offer 'free' shares on which dividends are paid in the future. But the share price is adjusted downwards depending on the bonus ratio. In the case of a 1:1 bonus, 100 shares will become 200 shares, but the share price prevailing on the record date will get halved after the bonus issue.

A shareholder's wealth remains the same - double the shares at half the price. What can happen after the bonus issue? One year later, dividends are likely to be paid on the enhanced quantity of shares, but the dividend payout ratio is usually maintained by reducing the dividend percentage. The total dividend received by the shareholder remains the same.

There is a downside as well. After receiving the bonus shares, many shareholders sell the original quantity - specially if bought less than a year back - to book a short-term loss and get a tax break by adjusting the loss against short-term profits. This selling pressure pushes the stock price below the already halved ex-bonus price. So the actual wealth of shareholders, who do not avail the tax break, may go down after the bonus shares are issued.

But there are long term benefits if the company continues to perform well in the future - and Reliance should do so. (A bonus announcement is management's way of communicating a bright future to shareholders.) The dividend payments gradually increase, and the investor receives a higher amount each subsequent year.

Why the muted buying? Several reasons. The company's performance over the next few quarters are not likely to be exciting. The KG basin gas selling fiasco and the ongoing public feud amongst the Ambani siblings is creating negative ripples in Government circles, and uncertainty among large shareholders.

Reliance had out-performed the Sensex by gaining 167% from its Oct 27 '08 low of 930 to its May 19 high of 2490. Subsequently, the stock has under-performed by going through a 4 months long sideways consolidation.

If 'good news' doesn't move a stock up sufficiently, it is an indication that there is no longer enough buying interest in the stock. The fact that the Sensex is in some sort of a topping formation is also restricting the bulls at the Reliance counter.

Existing investors may continue to hold. New entrants can make a token purchase at current price, and buy more on dips. (I stay far away from any stock with the 'Reliance' name in it.)

Related post

Why rely on Reliance?

Now, learn portfolio strategies from a game of stud poker

One of the best ideas for managing your portfolio on an ongoing basis is to treat each stock (or fund) in your portfolio as a hand in a game of stud poker. Not my idea. Peter Lynch mentioned it in his book: "One Up on Wall Street".

Stud poker is a 'man's game', pitting strong-willed men with nerves of steel and expressionless faces against each other across a card table. The game has been immortalised in several Hollywood films.

Two of them - my favourites - come to mind. The old pro, Edward G. Robinson playing against the new kid on the block, Steve McQueen, in "The Cincinnati Kid". And a sophisticated Robert Shaw being taken for a ride by a bumbling Paul Newman in "The Sting".

The game - for the uninitiated - is simple enough. A card is dealt face-down, which can only be seen by the player to whom it was dealt. This is immediately followed by a second card dealt face-up to each player. All players get to see the face-up cards. A round of betting follows. Each bet is for a specific amount.

A player has the option to 'fold' (i.e. take no further part, if the cards he has been dealt are not to his liking); 'call' (i.e. stay in the game by betting an equal amount) or 'raise' (i.e. increase the bet by a pre-determined amount). Every time a player raises the bet, another round of betting follows.

The process is repeated three more times, as a card is dealt face-up to each player remaining in the game. After all five cards for each hand have been dealt (one face-down and four face-up) and the betting is concluded, the players remaining in the game show their hands to the others. The player with the best five card combination wins.

I'm not a gambling man, nor do I advocate a gambling mentality in the stock market. But the analogy - that each stock (or fund) in your portfolio is akin to a hand at stud poker - seems very apt.

The face-down card is like some knowledge or information you may have about the company that may not be known to the general public. Each face-up card is some bit of financial news or company-specific information that becomes available in the market.

As each 'card' is dealt, you need to take some action as an investor. If it is pretty bad news - like the Satyam fraud, or Punj Lloyd's overseas subsidiary delaying a project and incurring a huge penalty - you should fold (i.e. sell) that particular hand.

If it is so-so or good information - like Larsen and Toubro bagging a new order, or Tata Investment declaring a marginal profit and matching last year's dividend - you may hold your stock (or fund).

If it is better news - like 3i Infotech declaring increased profits when most IT companies were struggling in the down turn - raise the bet (i.e. buy some more).

You'll need the mental and physical discipline of tracking each bit of information about each of the stocks (or funds) in your portfolio, analysing the consequences and filing it properly at a place from where it can be retrieved easily.

It is not rocket science, but it has to be followed diligently on a regular basis - at least once a week. That means not only tracking company results and announcements, but also the forex rates and macro-economic and political news to understand the implications and likely effects on your portfolio.

Many intelligent individuals never succeed in their market investments. A probable cause can be the lack of time and/or discipline in following a regular process of updating information about their portfolio holdings.

Life becomes a lot easier if you manage to limit your holdings to 10-12 stocks or 5-6 mutual funds. Keeping track of fewer companies improves your chances of being able to move quickly as the situation demands.

Weekly tracking of a smaller number of companies (or funds) means you will tend to remember the important bits of information necessary for taking buy-sell-hold decisions.

Will the H1/L1 US visa restrictions 'news' affect the IT sector?

A couple of months back, I had written a post about how to use financial news. Four categories of 'news' were discussed - good, great, bad and worse. Some suggestions about how to deal with such news were given.

What if there is a fifth category? Some item that appears in the pink papers or business channels as 'news' and causes some turmoil in the stock markets - but later turns out to be a misinterpretation? It wasn't really 'news'?

It is difficult to take any action till you receive further clarifications. Or, you may have an 'insider' in the industry or sector who can separate the wheat form the chaff and go to the core issue to advise you.

The recent 'news' about the H1/L1 visa restrictions for temporary non-immigrant workers in the USA is a case in point. The business channels went to town about it, asking leading members of the IT industry how these restrictions will affect their top lines and bottom lines.

Some retail investors dumped Infosys, TCS and other IT stocks. Some even stated that the leading IT sector stocks had become 'fundamentally weak'. The 'smart money' lapped up the stocks.

Any one who has spent a few years in the IT industry and has worked in the USA would take such 'news' in their stride. Because (s)he would know that similar 'news' keeps popping up every so often only to dissolve without a trace.

Why? Because the visa restriction 'news' was only a proposal by a couple of senators - pandering to the popular misconception that most of USA's unemployment problems have been caused by jobs being outsourced to India.

It takes a very long while - some times, forever - for such restrictive proposals to become a law. The proposal needs to be tabled and passed in the US Congress and the Senate. There will be a strong Indian-American lobby that will be working against it.

Even if the proposal gets through both houses, it is likely that there will be several amendments made to the original draft proposal. Each amendment will take its own sweet time to go through.

The US President has to sign the revised proposal to turn it into a 'law'. He has the authority to turn it down, or - you guessed it - seek more amendments. Many such proposals never get to become a law. Even if it does, most of the severe restrictions are likely to get diluted.

At the end of it all, should the visa restrictions become a law, it will not take effect retrospectively. Meaning, existing H1/L1 visa holders will not be affected. Only new visa applications made after the law comes into effect will face the restrictions.

Who might get affected the most in the IT sector? It will be the small body-shoppers whose business model is to hire out programmers to different US companies.

Also affected will be large US IT companies like Microsoft, Oracle, Cisco who employ significant numbers of H1/L1 software personnel from India. They will face difficulty in finding new employees from the US job market. So they will probably be lobbying the US government to veto such a restrictive proposal.

Infosys, TCS, Wipro have globally dispersed businesses, with a large portion of the work done 'offshore' in India. They will be inconvenienced, but the effect on their top line and bottom line will be very little.

Stock Market News, Financial News - Mar 27, 2009

Heavy borrowing could pressure rates - officials

By Rajesh Kumar Singh and Manoj Kumar

NEW DELHI (Reuters) - India could overshoot its annual borrowing target in the 2009/10 fiscal year if more fiscal stimulus is rolled out to revive a slowing economy, and this will put pressure on interest rates, senior officials said on Friday.

Policy advisers also said the economy will fare significantly worse in 2009 than in the previous year, and more doses of fiscal and monetary policy may be needed to boost demand and lift growth.  (More ...)

Will Satyam be an albatross around Larsen's neck?

By Sumeet Chatterjee

BANGALORE (Reuters) - Larsen & Toubro is seen as the front-runner to acquire fraud-tainted outsourcer Satyam Computer Services Ltd but a potential purchase could bring more pain than gain.

Not only will the acquisition be a tricky one due to uncertainty about Satyam's accounts and potential legal liabilities from U.S. lawsuits but also it would distract Larsen from its main engineering and construction business.  (More ...)

Reliance signs gas deal with fertiliser firms

NEW DELHI (Reuters) - Reliance Industries on Friday signed deals with 12 fertiliser firms to sell about 15 million standard cubic metres a day (mmscmd) of gas from its block off the country's east coast. Supplies will start from mid-April, Reliance said. 

The firms will pay Reliance a marketing margin of 13.5 cents per million British thermal units (mmBTU) for the gas, said Satish Chander, Director General of Fertiliser Association of India. The margin is in addition to the government-set price of $4.2 per mmBTU for the gas.       (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Market

Stocks Moving Lower As Traders Cash In On Recent Gains

Stocks are showing notable weakness during mid-morning trading on Friday, as investors take profits from the recent rally and digest some mixed economic news. With the decline, the Nasdaq has once again slipped below the unchanged line for the year-to-date period.

On the economic front, the Commerce Department released its report on personal income and spending in the month of February. While the report showed an increase in spending that came in line with estimates, income fell by a little more than expected.

The report showed that personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, the Commerce Department said that personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

The final reading of the Reuters University of Michigan's consumer sentiment index for March was also released earlier, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.

In other news, President Barack Obama is meeting today with the CEOs of JP Morgan, Citigroup, Goldman Sachs and other banks, as well as executives from industry associations, to discuss the economy and the administration's proposals to increase regulation of the financial system.

Additionally, President Obama will soon unveil the results of a federal examination of the restructuring plans from General Motors and Chrysler, a condition for the auto-makers to rece ive more government capital.

White House Press Secretary Robert Gibbs said the details would be announced before the President departs for the G20 Summit in London on Tuesday.

"The President, as part of viability plans from both GM and Chrysler, is required by the 31st to give an update on those plans and where our government sees them, and we'll be doing that also in the next few days," Gibbs said.

The major averages pulled back to new lows for the session in recent trading, but they have regained some ground since then. The Dow currently remains down 128.39 at 7,796.17, the Nasdaq is down 29.14 at 1,557.86 and the S&P 500 is down 13.55 at 819.31.

European Shares

Europe's top stocks have swung into the red in choppy trade on Friday, led lower by a weak energy sector. U.K.'s FTSE 100 Index is showing a loss of 0.9 percent, while the French CAC 40 Index and the German DAX Index are falling 2 percent and 2.1 percent, respectively.

Asia Markets

The Japanese stock market took a pause for breath Friday bringing to an end nine successive days of rises for the Topix index.
Nevertheless, the Nikkei 225 index reached its highest point since 9 January during the session before easing back to 8,626, down 9 points. Hong Kong's Hang Seng Index ended the day up 0.1 percent.

Commodities

Oil and gold rise after gloomy GDP data
The worst US GDP data for 26 years sent investors scurrying for the safety of gold, pushing the April futures contract up to $940, up $4.20 on the day.

US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

Meanwhile, the appeal of gold as a safe asset was further enhanced by news that the total number of US unemployed rose to a record 5.56m, although the dollar’s strength limited the extent of gold’s gains.

The oil price was also on the rise, with the April contract rising above $54 a barrel, reversing Wednesday’s losses when the Energy Information Administration revealed that crude inventories rose by 3.3m barrels last week.

Forex
Dollar dominant
US GDP data that was not as bad as feared prompted support for the greenback Thursday. Though US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2%, it was still better than consensus forecasts from economists of a 6.6% fall.

Sentiment towards the dollar was also boosted by the relative success of the US Treasury’s auction of seven-year notes. The Treasury sold $24bn of notes at a yield of 2.384%.

The euro was out of favour after data from the European Central Bank (ECB) showed a slowdown in the growth of private sector lending. The aggregate value of loans was 4.2% higher in February than a year earlier, compared with a 5% year-on-year g ain in January. The figures are likely to add pressure to the ECB to cut interest rates some more this year, which will diminish the appeal of the euro.

Sterling also fell back in New York trading despite a good response to the sale of index-linked gilts due to mature in 2022, which was oversubscribed. The auction result came as a relief after the flop the previous day of the auction of 40-year gilts.

The pound fell back by almost a cent, to $1.4444 in New York, having earlier made headway in London trading, where it reached $1.4562. However, even in London the currency finished below its best levels of the day after UK retail sales data revealed a far bigger than expected 1.9% drop in sales from the previous month.

Stock Market News, Financial News - Mar 26, 2009

WTO head warns of slippage in protectionism fight

GENEVA (Reuters) - Global commerce risks being strangled by an incremental build-up of restrictions that could undercut policies to revive the world economy, the head of the World Trade Organisation (WTO) said on Thursday.

WTO Director-General Pascal Lamy said there were no signs of an imminent descent into high-intensity protectionism.  (More ...)

RBI to buy back $15.8 billion of bonds

NEW DELHI (Reuters) - The Reserve Bank of India (RBI) plans to buy back 800 billion rupees ($15.8 billion) of bonds from the market between April and September to soothe investors' nerves after the government detailed a massive borrowing plan.

The yield on the benchmark 10-year bond had jumped to two-week highs above 7 percent on Thursday, and opinion was divided on the potential impact of the central bank's intended buying. Bond markets are shut on Friday for a holiday.  (More ...)

Wall St clampdown in prospect, Europe data gloomy

By Gilbert Kreijger

AMSTERDAM (Reuters) - U.S. and European officials outlined plans for tough new financial rules on Thursday, part of efforts to stabilise the economy and curb the risk-taking that nearly wrecked the banking sector and set off a worldwide recession.

President Barack Obama's treasury secretary, Tim Geithner, was set to outline proposals in Congress that would create a powerful systemic risk regulator with authority to look deep into non-bank financial firms, such as hedge funds and private equity firms, officials said.  (More ...)

RBI: challenge to stem growth slowdown

By Manoj Kumar and Rajkumar Ray

NEW DELHI (Reuters) - The economic slowdown has been steeper than previously estimated and the challenge is to arrest it, but further fiscal stimulus will carry a cost, Reserve Bank of India Governor Duvvuri Subbarao said on Thursday.

His comments came soon after the government said it would tap markets for 2.4 trillion rupees ($47.4 trillion) of borrowings in the first half of 2009/10, two-thirds of its projected record borrowing for the full fiscal year that starts on April 1.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Market

Stocks Remain Mostly Positive In Late Morning Trading

After showing a strong upward move earlier in the session, stocks continue to see notable strength in late morning trading on Thursday. The major averages all remain in positive territory, adding to the gains posted in the previous session.

Transportation stocks are turning in some of the market's best performances, as traders express some optimism about signs of stabilization in the economy. Significant strength is visible among railroad stocks, which saw notable weakness on Wednesday.

A variety of other sectors have also shown strong upward moves over the course of the morning, with health insurance, steel, healthcare provider, and housing stocks posting notable gains.

On the other hand, banking stocks have moved back to the downside after ending the previous session mostly higher, limiting the upside for the broader markets. Tobacco stocks are also giving back some ground after trending higher in recent sessions.

In recent trading, the tech-heavy Nasdaq rose to a new high for the session, although it has given back some ground in the past few minutes. The Nasdaq currently remains up 29.50 at 1,558.45, while the Dow is up 44.45 at 7,794.26 and the S&P 500 is up 7.04 at 820.92.

US GDP worst for 26 years

The struggling US economy posted its worst performance since 1982 in the three months to December, government data confirmed today.

GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

The decline was spread across the whole economy with consumer and businesses suffering equally. Consumer spending fell by 4.3% rate with the large ticket items down by 22%. Housing fell 23% completing three straight years of decline. Business spending fell by 28% rate, with exports tumbling at a 24% rate.

Economists say the economy is still struggling, with current forecasts suggesting a 5% decline in the current quarter though some tentatively predict a recovery towards the end of 2009.

The IMF recently forecast the US likely to contract by 2.6% in 2009, taking it back to levels seen in the eighties, though it could rebound by the third quarter of 2010.

Canadian Market

Toronto stocks have rallied in early trading Thursday to recover some of the recent slide. Resource stocks have led the upward charge as commodity prices moved higher.

The S&P/TSX Composite Index has added 97.74 points or 1.11% to move at 8,895.18. Bay Street's main index has closed lower in each of the two previous sessions.

European Shares

Europe's top stocks are largely unchanged in midday trade, with the German Dax posting some gains and the French and Swiss markets both in red territory.

German consumer confidence fell slightly to 2.4 in April from a revised reading of 2.5 in the previous month. It was the first drop in seven-months.

Asia Markets

Indian market surges on global rally

Thursday, the Indian market closed higher for the fourth straight session amid strong global cues after better-than-expected economic data in the U.S. fueled hopes of an economic recovery in the world's largest economy.

Additionally, sustained buying by foreign funds in the past few days, hopes of rate cuts following a further retreat in the inflation rate and short covering on account of the expiry of the March series derivatives contracts aided the rally.

The inflation rate dropped to 0.27% in the 12 months to March 14 compared to 0.44% in the previous week, driven by a sharp fall in price of inputs and food articles and on account of high base effect. Significantly, prices of manufactured items showed a modest rise on a week-over-week basis.

The BSE Sensex opened higher at 9,740 and rose to a fresh 2-1/2 month high of 10,061 before finishing at 10,003, up 335 points or 3.47% over the previous close. Similarly, the S&P CNX Nifty rose 98 points or 3.28% to 3,082.

Commodities

Oil prices came under pressure on Wednesday but settled off earlier lows after the government’s weekly report showed a much bigger than expected build in energy stockpiles.

The Energy Information Administration said crude inventories rose 3.3m barrels last week compared with expectations of a 1.4m barrels increase.

Gasoline inventories fell by 1.1m barrels in the week while forecasts had been for a decrease of 900,000 barrels. Meanwhile distillate, which is used in diesel and heating oil, fell by 1.6m barrels, bigger than the 200,000 barrels decline expected.

Stock Market News, Financial News - Mar 25, 2009

Oil nears $54 on Geithner comments

By Chris Baldwin

LONDON (Reuters) - Oil retraced early losses on Wednesday, rising to around $54 a barrel after the U.S. Treasury Secretary said he was "quite open" to recent Chinese suggestions on moving to a new global reserve currency.

Oil appeared little moved by data from the Energy Information Administration that showed U.S. weekly crude stocks rose last week to their highest since 1993.  (More ...)

Satyam value in peril over toxic liabilities

Hindustan Times

The government's silence on the provision of any amnesty or protection scheme to prospective buyers fraud-hit Satyam Computer Services is set to bring down the valuation of the IT firm significantly, say experts involved in the deal.

The issue will be raised by the shortlisted bidders in the course of the due diligence process. Bidders, who are not satisfied with the financial and legal data provided to them on the IT firm, could even back out at the final stage.  (More ...)

Dabur's Burman plans 200-strong eatery chain

Hindustan Times

From Ayurvedic medicines and consumer goods to fast food. Dabur's vice-chairman Amit Burman is now on an entrepreneurial drive to set up a chain of quick-service food outlets.

"We are going to invest Rs 200 crore towards 200 "Lite Bite" food joints to be set up soon all across India," Burman told reporters on the sidelines of the Food Forum of India industry seminar last week.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Major Averages Move Off Their Highs But Remain Firmly Positive

Stocks have shown a strong upward move over the course of morning trading on Wednesday, with the major averages offsetting the losses posted in the previous session. The rebound comes as traders react to some much better than expected economic data.

Earlier in the day, the Commerce Department released a report revealing that durable goods orders unexpectedly showed a substantial increase in the month of February after falling in each of the six previous months.

The report showed that durable goods orders jumped 3.4 percent in February after falling by a revised 7.3 percent in January. Economists had been expecting durable goods orders to fall by 2.5 percent compared to the 4.5 percent decrease that had been reported for the previous month.

The Commerce Department also released a separate report showing an unexpected in increase in new home sales in the month of February, continuing a recent string of better than expected housing market reports.

The report showed that new home sales rose 4.7 percent to an annual rate of 337,000 in February from an upwardly revised January rate of 322,000. The results surprised economists, who had been expecting sales to fall to 300,000 from the 309,000 originally reported for the previous month.

In recent trading, the major markets have moved well off their best levels of the day, although they are holding onto strong gains. The Dow is currently up 148.46 at 7,808.43, the Nasdaq is up 26.03 at 1,542.55 and the S&P 500 is up 15.07 at 821.32.

Canadian Market

Toronto Stocks Move Moderately Higher In Morning Trading

Toronto stocks have turned higher in Wednesday morning trading, recovering some of the losses seen yesterday. Gold-related stocks were among the big gainers as the precious metal rebounded on the Comex.

The S&P/TSX Composite Index has added 79.27 points or 0.89% to move at 8,928.66. A higher close would be the 10th in 12 sessions.

European Shares

FTSE struggles as miners fall
Market Movers
FTSE 100 3,866.48 -1.15%
techMARK 1,123.30 -0.37%
FTSE 250 6,319.36 -1.31%

For the second day in a row a bright start has been undermined by the mining sector.

Platinum is the problem today with Anglo American and Lonmin the worst performers, though Rio Tinto is also lower even though the Australian Competition & Consumer Commission opted not to block the increase of Chinalco’s stake to 18%.

Broker Evolution Securities observed that the controversial deal still has more difficult obstacles to overcome and suggests that the recent rally in the Rio share price presents a ‘strong selling opportunity’.

Asia Markets

Asian markets end mixed as investors take profits

The markets across the Asia-Pacific region ended mixed on Wednesday, as investors preferred profit taking following an extended relief rally. The markets, having shrugged off the early weakness following a weak closing by Wall Street stocks, could not maintain the momentum and the euphoria over a revival in global economic conditions seems to be losing steam for want of evidence that could instill confidence. Global demand continues to be weak as is evident from a report released earlier in the day by the Japanese government, which showed that exports plummeted by a record 49.9% year-over- year while imports fell 43.0% year-over-year to 3.443 trillion yen.

Commodities

Crude Oil Drops Ahead Of EIA Report

Oil prices dropped for a second straight day on Wednesday as traders looked ahead to the Energy Information Administration's weekly inventory report. The drop took crude further off its recently seen multi-month high.

Crude oil prices fell to $52.60, down $1.38 for the session. Prices touched as low as $52.08 in the early going.

Stock Market News, Financial News - Mar 24, 2009

HDFC cuts loan rates by 50 bps

MUMBAI (Reuters) - Housing Development Finance Corp said on Tuesday it is cutting its retail prime lending rate by 50 basis points from March 25.

The lending rate has been brought down by 100 basis points since December 2008, it said.  (More ...)

Reliance gas to cut oil use in India - Goldman

NEW DELHI (Reuters) - Gas supplies from Reliance Industries' KG Basin block will replace about 7 percent of local oil consumption in 2009/10, rising to 14 percent in the following three years, Goldman Sachs said in a report.

The U.S. bank said the start of supplies from the block off India's east coast would also trigger investment of over $10 billion in gas transmission and distribution infrastructure in the next five years.

It would also reduce the country's current account and fiscal deficits and support economic growth, Goldman Sachs said.  (More ...)

GE-Hitachi in N-reactor pacts with BHEL, NPC

Hindustan Times

GE Hitachi Nuclear Energy (GEH), a joint venture of US-based General Electric and Japan's Hitachi, on Monday announced the signing of two agreements with the Nuclear Power Corporation of India (NPCIL) and Bharat Heavy Electricals Ltd (BHEL) to build nuclear reactors for power generation in India.

Speaking to Hindustan Times, Kishore Jayaraman, CEO, GE Energy, for India, Bangladesh and Sri Lanka, said that under the agreements, GEH along with NPCIL and BHEL will plan necessary resources required in the manufacturing and construction of a multiple-unit Advanced Boiling Water Reactor (ABWR) nuclear power station.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Nasdaq Pulls Back To A New Low For The Session

Stocks are seeing notable weakness in mid-morning trading on Tuesday, with the major averages giving back some ground after posting standout gains in the previous session. The weakness in the markets is largely due to profit taking following Monday's rally.

While stocks are moving mostly lower, selling pressure has remained somewhat subdued, as traders keep an eye on comments by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner's before the House Financial Services Committee.

In prepared remarks, Bernanke drove home the point that while the bonuses AIG has given to employees were inappropriate, the overall bailout of the world's largest insurer was necessary to prevent a 1930s style meltdown.
Additionally, Geithner made it known that the AIG Financial Products division was unregulated, operating in unregulated ways and that all institutions that pose systemic risk to the broader economy must be subject to oversight.

The major averages have moved to the downside in recent trading, with the tech-heavy Nasdaq pulling back to a new low for the session. The Dow is currently down 100.75 at 7,675.10, the Nasdaq is down 27.08 at 1,528.69 and the S&P 500 is down 11.99 at 810.93.

Canadian Market

Toronto Stocks Surrender Some Of Recent Rally

Toronto stocks have turned lower on Tuesday as traders cashed in on a recent rally. The drop took the market off its highest level in six weeks.

The S&P/TSX Composite Index has lost 135.40 points or 1.51% to 8,766.65. The index has closed higher in nine of the previous sessions.

European Shares

Early gains evaporate after inflation data
Market Movers
FTSE 100 3,910.16 -1.08%
techMARK 1,129.66 +0.82%
FTSE 250 6,407.82 +0.26%

Blue chips have reversed their early gains after inflation data showed a surprise rise in the government's measure in February.

Economists were scratching their heads as to why prices rose to 3.2%. RPI, arguably the real measure of inflation, fell to zero, but again this was higher than expected with minus 0.5% the consensus figure.

Asia Markets

Asian markets end higher on optimism about banking sector stability

The major markets across the Asia-Pacific region ended in the green on Tuesday, buoyed by the cues from Wall Street, where the markets witnessed the biggest one-day rally since October 2008 after the Obama Administration unveiled plans to help banks sell toxic assets and pave way for a revival in credit flow, which is critical for reviving the economy. Positive economic data on existing home sales also lifted market sentiment.

Market analysts are speculating that the extension of the relief rally might signal that the bottom has already been reached and the markets may find stability in the short-term, on optimism that the plans will really work and the global economic recovery might take place sooner than expected, with the banking sector likely to lead the recovery.

Commodities

Crude Backs Away From Multi-Month High

Crude oil prices edged lower on Tuesday and gave back some of yesterday's rally. The decline took prices away from the recently-seen multi-month high.

Light sweet crude for May delivery fell 48 cents to $53.32 per barrel. Prices slipped as low as $52.87 in the opening moments of the session after touching above $54 on Monday.

Traders looked ahead to the Energy Information Administration data on weekly inventories, due Wednesday. Last week's report showed crude oil inventories increased 2 million barrels from the previous week. Motor gasoline inventories unexpectedly increased by 3.2 million barrels last week.

Stock Market News, Financial News - Mar 23, 2009

Tata Nano to hit roads in July

By Janaki Krishnan

MUMBAI (Reuters) - The Nano, the world's cheapest car, will hit Indian roads in July, four months after its formal launch on Monday, and demand is expected to far outstrip supply as the price tag of around $2,000 draws legions of new buyers.

Hundreds of thousands are expected to put their name down for Tata Motors' Nano, including many previously limited to motorbikes or public transport.  (More ...)

U.S. lays out plan to attract buyers for toxic debt

By David Lawder and Glenn Somerville

WASHINGTON (Reuters) - The U.S. Treasury Department on Monday rolled out detailed plans for persuading private investors to help rid banks of up to $1 trillion in toxic assets that are seen as a roadblock to economic recovery.

Generous government financing will underpin the so-called Public-Private Investment Program, which Treasury will kick off with $75-$100 billion that comes from its existing $700-billion bailout fund approved by Congress last fall.  (More ...)

Vodafone, Telefonica to share Europe networks

Financial Express

Vodafone and Telefonica have agreed to share network infrastructure in four European countries to meet a surge in demand for mobile broadband while saving hundreds of millions of pounds in costs.

The agreement announced on Monday, the biggest of its kind to cover multiple countries, is a sign of the urgency to save money and also of the success of flat-rate data packages in stimulating demand for Internet access on the go.  (More ...)

IMF says clean banks before crisis can be solved

GENEVA (Reuters) - The economic crisis cannot be resolved until the banking sector is cleaned up, the head of the International Monetary Fund said on Monday.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Major Averages Rally To New Highs For The Session

Stocks are showing significant strength during mid-morning trading on Monday, as investors cheer the new plan for fixing the downtrodden banking sector. Some strong earnings in the retail sector and existing home sales figures are also helping to drive stocks higher.

Earlier in the day, Treasury Secretary Geithner announced his plan to help the troubled banking industry. The plan will involve setting up an investment fund to buy mortgage-related securities and other assets that are driving down the balance sheets at the banks.

The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending.

On the economic front, existing home sales for the month of February came in considerably better than analysts had anticipated, rising to a rate of 4.72 million from a pace of 4.49 million units in January. Economists had expected sales to slip to a 4.45 million unit rate.

The major averages have seen some further upside in recent trading, rising to new highs for the session. The Dow is currently up 276.22 at 7,554.60, the Nasdaq is up 51.03 at 1,508.30 and the S&P 500 is up 28.73 at 797.27.

European Shares

Barclays boosted by iShares talk

Financials and miners are leading London’s advance as the market awaits an announcement later today by US Treasury Secretary Timothy Geithner in which he is expected to give more details of the US government's stimulus plans.

With further help for the banking system expected to be announced by Geithner, banks are understandably in demand. Barclays is higher on talk that it could conclude a sale of iShares business for £5bn as early as this week. Barclays bear Sandy Chen at Panmure Gordon is unimpressed, and said his 40p price target for Barclays could be cut if the bank offloads iShares.

Asia Markets

Asian markets advance on stimulus expectations; resource, financials gain

The major markets across the Asia-Pacific region advanced on Monday, led by resources and financial stocks, on higher commodity prices. Hopes of a stimulus package from Japan to revive the economy, announcement from China that it would meet its growth target and expectations of initiatives from U.S to unclog the credit markets and remove the toxic assets from the banks' balance sheets, more than offset the weaker closing in Wall Street on Friday.

In Asian trading, crude oil futures for May delivery, in their first day as a front-month contract, are currently at $52.67 a barrel, up $0.60. On Friday, the April futures expired at $51.06 a barrel, up $0.55 from their previous close.

Commodities

Gold Prices Edge Lower Again

Gold prices inched lower again in early trading on Monday, giving back a little more of last Thursday's massive rally. Trading took place amid the release of details of a new government plan to subsidize private investors' purchase of toxic assets on the books of troubled banks.

April-dated gold fell to $947.50, down $8.70 for the session. Prices dipped as low as $947.20 after earlier trading at $958.10.

Stock Market News, Financial News - Mar 20, 2009

Oil at $52, recoups losses after ship collision

By Chris Baldwin

LONDON (Reuters) - Oil hovered above a four-month high on Friday at $52 a barrel, recouping earlier losses as the market sought a new base above $50 and after news of a ship collision in the key Strait of Hormuz shipping lane.

The market surged on Thursday to $51.61, its highest settlement since Nov. 28, after the U.S. Federal Reserve announced a plan to buy long-term government debt and the dollar fell, boosting investor appetite for commodities.  (More ...)

SEBI seeks comments on derivative proposals

MUMBAI (Reuters) - India's market regulator is seeking comments on recommendations to introduce over-the-counter products and mini contracts in individual stock derivatives, as well as options contracts with a tenure of three years or more.

The Securities and Exchange Board of India (SEBI) said its Derivatives Market Review Committee also recommended that products such as options on currency futures and derivatives on volatility indexes should be considered.  (More ...)

Ashok Leyland Feb sales drop, duty cuts help

MUMBAI (Reuters) - Sales by Indian commercial vehicle maker Ashok Leyland Ltd in February more than halved from a year ago as a sliding economy put a brake on industrial activity and the movement of goods.

Sales of trucks and buses dived 57 percent to 3,245 units in the month, the firm said on Wednesday. But that was up a third from January after the government lowered factory gate duties.

Earlier in the week, its rival Tata Motors reported a similar trend, with sales dipping an annual 25 percent in February, recovering some ground from a sharper 43 percent contraction in the month before.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Major Averages Turn Mixed After Seeing Early Strength

Stocks are seeing notable uncertainty during mid-morning trading on Friday as investors react to some mixed corporate news and wait for a speech from Fed Chairman Ben Bernanke. The major averages have had difficulty sustaining any significant moves.

Bernanke's speech is expected to cover the financial crisis and community banking when he delivers it at the Independent Community Bankers of America's National Convention at 12 am ET.

European Shares

FTSE tracks sideways as financials cancel each other out

FTSE is tracking sideways today as a weak bank sector offsets more gains for the life insurers. HSBC and Barclays are among the worst performers after the former went ex-rights, but elsewhere in the banking sector, Lloyds is going well.

Life groups continue to tick up led by Legal & General and Prudential. The Pru is being helped by stories that its new chief executive's first job could be to break the life group up.

Asia Markets

Asian markets end mixed; financials drop on profit taking

Mixed trading was witnessed in the major markets across the Asia-Pacific region on Friday, except Japan, which is closed for a holiday, following weak cues from Wall Street, where profit taking dragged the major indices lower despite a rise in commodity, gold prices. While resource stocks advanced on higher commodity prices, investors were skeptical over the moves of the U.S Federal Reserve and the Bank of Japan towards quantitative easing through printing money that might stoke inflation in the long term.

In Asian trading, crude oil was modestly lower in electronic trading, after rising $3.47 to $51.61 a barrel on the New York Mercantile Exchange on Thursday.

Commodities

Gold Prices Inch Lower After Huge Rally

The price of gold edged lower on Friday morning as some investors collected profits on yesterday's sharp rally. The dollar steadied against major rivals following massive losses in recent days.

April-dated gold futures fell to $50.58, down $1.03 for the session. Prices touched as low as $948.70 in the early going.

Gold soared $68.70 on Thursday amid worries of inflation after the Federal Reserve's plan to buy as much as $1.15 trillion in bonds was revealed yesterday. The rally took the metal to its best levels in almost a month.

Stock Market News, Financial News - Mar 19, 2009

India adds 13.45 m mobile users in Feb - TRAI

NEW DELHI (Reuters) - Indian mobile firms added 13.45 million subscribers in February, a performance bettered only by January's record signings of 15.41 million, data from the telecoms regulator showed on Thursday.

The country's mobile subscriber base rose to 375.74 million at end-February, the Telecom Regulatory Authority of India said, rising 3.7 percent from January.  (More ...)

India, China agree to remove irritants in trade

Financial Express

China, concerned over recent six-month ban by India on its toy exports on health and safety grounds, has called for boosting and diversifying the bilateral trade between the two countries. It has agreed to give India more market access. 

India-China bilateral trade during 2007-08 was to the tune of $37.9 billion with the balance tilted in favour of China. India's exports amounted to $10.8 billion while its imports were $27.1 billion.  (More ...)

Tata Motors ties up with Indian Bank for retail finance

India's largest auto maker, Tata Motors, on Thursday said it has tied up with public sector lender Indian Bank for providing financing facilities to its passenger vehicle customers.

"In order to provide an added facility of car finance to its customers, Tata Motors has entered into an understanding with Indian bank for financing its range of passenger vehicles," the company said in a statement.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Major Averages Turning In A Mixed Performance

Stocks have come off their highs in mid-morning trading on Thursday and are showing significant uncertainty as investors respond to mixed news from the economic and corporate fronts. The major averages are currently turning in a mixed performance.

The uncertainty follows a late day rally in the previous session, when investors benefited from a positive reaction to the Federal Reserve's plan to buy treasury notes and mortgage-related assets, driving a sharp upward move in late day trading.

European Shares

London’s advance is growing in strength, despite expectations of a weak opening on Wall Street. Financials lead the advance, supported by miners, on hopes that the US programme of quantitative easing will boost the world’s major economy.

In a move mirroring recent actions by the Bank of England, the US central bank said it would move to buy treasury notes with maturity dates of between two to 10 years to “help improve conditions in private credit markets.”

Asia Markets

Asian markets end mixed; Financials advance on U.S initiative to unclog credit markets

Mixed trading was witnessed among the major markets in Asia-Pacific region on Thursday, with markets in Japan, Taiwan and South Korea drifting lower while markets in Australia, China, Singapore, Hong Kong, Malaysia and Indonesia ended higher.

In Asian trading, crude oil advanced $0.87 a barrel to $49.01 in electronic trading, after closed down $1.02 at $48.14 a barrel on the New York Mercantile Exchange on Wednesday.

Commodities

Gold Surges More Than $50 An Ounce

Gold soared in early trading Thursday amid recession fears on Federal Reserve's plan to buy as much as $1.15 trillion in bonds. The metal surged in electronic trading following the announcement Wednesday afternoon.

April-dated gold moved to $948.00, up $58.90 for the session. The metal hit as high as $951.90 in electronic transactions.

Stock Market News, Financial News - Mar 18, 2009

Investment drought spells fresh energy crisis

By Barbara Lewis and Simon Webb

VIENNA (Reuters) - No sooner has the world recovered from a deep economic downturn than it could face a set-back from surging oil prices, energy leaders warned on Wednesday, citing a sharp drop in investment in the sector.

Representatives of consumers, producers, national and international oil companies agreed at an OPEC seminar that a weaker oil price had meant delayed or cancelled projects. (More ...)

Maxis commits $10 billion to Aircel

NEW DELHI (Reuters) - Malaysia's Maxis Communications Bhd is investing $10 billion in its Indian unit Aircel to accelerate its expansion in the world's fastest-growing mobile market, and is interested in bidding for 3G spectrum.

Half of that has already been spent expanding Aircel's network, Maxis chief executive Sandip Das said at the launch of services in the lucrative Delhi zone on Wednesday, adding he hoped to nearly double the number of subscribers this year.  (More ...)

IBM in talks to buy Sun Microsystems

By Ritsuko Ando and Anupreeta Das

NEW YORK (Reuters) - IBM is in talks to buy Sun Microsystems Inc, sources with knowledge of the matter said, a move that could bolster the technology giant against rivals in the high-end computer server market.

International Business Machines Corp is offering to pay at least $6.5 billion, or double Sun's Tuesday closing price of $4.97, The Wall Street Journal reported online earlier. Shares of Sun jumped 64 percent in pre-market trading to $8.16, while IBM shares fell 2 percent to $90.89.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Stocks at a Glance

Dow And S&P 500 Falling To New Lows For The Session

Stocks are seeing considerable weakness in mid-morning trading on Wednesday, as traders cash in on the market's recent gains. The major averages are giving back some ground after ending the previous session at their best closing levels in almost a month.

The weakness in the markets is largely due to profit taking, with traders cashing in on the strong gains seen in recent sessions. However, selling pressure has remained relatively subdued, helping the major averages to hold onto the bulk of their recent gains.

Some traders may be staying on the sidelines ahead of the Federal Reserve's announcement of its latest decision on interest rates.

European Shares - Back to square one

Leading shares are mixed after a poor set of UK unemployment figures put the kibosh on an early attempt to continue yesterday’s rally.

The number of people out of work rose to 2.03m in the November - January quarter from 1.97m in the October to December period. A record 138,400 people signed on for job seeker’s allowance in February. This was well in excess of the 90,000 new claimants that had been expected and brings the total number of claimants to 1.39m.

Asia Markets - Markets advance on Wall Street's gains

The major markets across the Asia-Pacific region advanced for the fourth day in succession, led by financials. However, the rally seems to be losing steam, with profit taking in select stocks and a slump in metals generating some selling pressure. Except Australia, all the other markets in the region ended in the green.

Crude oil ended $0.71 down in Asian trading at $48.45 a barrel in electronic trading, after having closed at $49.16 a barrel on the New York Mercantile Exchange on Tuesday. In the New York session, the commodity gained, $1.81 after hitting an intra-day low of $46.53 and a high of $49.82.

ADVFN World Daily Markets Bulletin - Mar 17, 2009

US Stocks at a Glance

Nasdaq Moves Firmly Positive, Dow Lingers Near Unchanged

With traders expressing some uncertainty about the near-term outlook for the markets, stocks are showing a lack of direction in morning trading on Tuesday. The major averages have had difficulty sustaining any significant moves.

The lackluster performance by the broader markets comes after stocks saw considerable late-day weakness in the previous session, bring an end to their recent 4-day winning streak.

Investors now seem to be questioning whether the markets will see any further upside or move back to the downside to retest the multi-year lows set earlier this month.

Nonetheless, some positive sentiment was generated by a report from the Commerce Department showing an unexpected increase in housing starts in the month of February. The growth was largely due to a significant jump in new construction of multi-family structures.

While the Nasdaq and the S&P 500 have moved firmly into positive territory in recent trading, the Dow is lingering near the unchanged line. The Dow is currently down 6.37 at 7,210.60, while the Nasdaq is up 12.49 at 1,416.51 and the S&P 500 is up 4.26 at 758.15.

Canadian Market

Bay Street Stocks Slightly Lower After Five-Session Streak Of Gains

Canadian stocks are slightly lower in early trading on Tuesday after gaining in each of the last five sessions. Gold-related stocks pulled the market lower as the precious metal fell on the Comex.

The S&P/TSX Composite Index dropped 38.03 down 0.45% to move at 8,348.68. The market had closed yesterday at a monthly high.

Gold stocks are leading the decliners with a 3.1% drop, while materials stocks are down 2.7%. April gold has dropped $5.50 to $916.50.

Kirkland Lake Gold is down 6.3% after the company reported third quarter net loss of C$4.69 million or C$0.08 per share, compared to a loss of C$1.89 million or C$0.03 per share in the year-ago quarter.

New Gold has lost 1.5% after the company reported fourth-quarter net earnings of US$41.1 million. Consolidated revenue for the quarter of 2008 was US$59.0 million.

Mining stocks have dropped 2.2% as Inmet is down 4.25%, Teck Cominco is down 3.4% and First Quantum has lost 3%.
Ensign Energy is flat after the stock was downgraded to Underweight from Market Weight by Thomas Weisel Partners.

OPTI Canada is down 1.13% after the company said president and chief executive officer Sid Dykstra, will step down, effective April 28. He will be replaced by Christopher Slubicki.

Meanwhile, Nokia Corp. announced it will cut about 1,700 jobs globally to increase cost-efficiency and acclimatize to the market situation.

On the economic front, Canadian manufacturing sales decreased 5.4% to $41.7 billion in January, falling to the lowest level in almost 10 years, according to data released by Statistics Canada.

The S&P/TSX Composite Index rallied 83.32 points or 1% to end at 8,386.71. The market closed at its highest level in more than one month

European Shares

FTSE recovery fizzles out
Market Movers
techMARK 1,132.52 -1.08%
FTSE 100 3,811.68 -1.35%
FTSE 250 6,200.98 -1.11%

FTSE made a brief move towards the blue late in the morning but is now firmly in the red, with an update from Shell and adverse broker coverage of other stocks weighing on the index.

Oil heavyweight Royal Dutch Shell is a drag on the index after the group’s strategy update. The group said it has balance sheet flexibility to maintain investment and grow dividends in the downturn and to fund future growth projects. The group said it is continuing with plans to build new upstream and downstream capacity, while managing the near-term challenges of the global economic slowdown.

Shell’s value is also hit by the lower oil price, which is usually good news for Carnival, but the cruise operator falls back after seeing its price target cut at RBS. The broker is worried that low bookings in January will affect the company’s results next week.

Caterer Compass is also hit by unfavourable broker coverage, with Deutsche Bank moving the stock to ‘hold’ from ‘sell’ after a share price rally. Cash call talk continues to dominate sentiment. Barclays is off the pace a little after yesterday's surge on news it may consider selling iShares to avoid joining the asset protection scheme.

Life and pensions group Friends Provident reported full-year underlying profits in line with expectations and said it expects new business in early 2009 to be below the 2008 comparatives.

Department store chain Debenhams is sharply lower after it said first half pre-tax profit will be ahead of previous year but there was no mention of the cash-call expected by some. The group said the combined impact of higher gross transaction value, gross margin and tight management of costs will result in first half profit before tax and EBITDA being ahead of the previous year.

JJB Sports has agreed a further extension of the standstill arrangements with its lenders and confirmed it is considering a company voluntary arrangement to help it ease some of its crippling debt problems.

Thomas Cook Group climbs after it said Karl-Gerhard Eick will succeed Thomas Middelhoff as non-executive chairman with immediate effect. Eick joined the Thomas Cook board in December 2008 as an Arcandor nominated non-executive director.

Component distributor Diploma has warned that a tough time for its seals business in the US and the adverse effects of the pound's weakness have hit both sales and profits in the past six months.

Higher production volumes and commodity prices pushed Venture Production profits up 82% in the year. Pre-tax profit rose to £184.2m from £101.2m last year as revenue rose 38% to £494.9m thanks to substantially higher oil prices especially in the first half of the year and strong UK gas markets.

Torotrak surged forward as Allison Transmission, the world leader in fully automatic transmissions for commercial vehicles, took a 10% stake at 16.5p per share and purchased technology rights for £8.4m.

Kirkland Lake Gold is upbeat after third quarter losses narrowed slightly from the previous quarter and as it sits on a pile of cash to fund mining operations in Canada.

Broadband and telecom systems company BATM Advanced Communications revealed a 20% increase in annual pre-tax profit but investors were disappointed and the shares fell back. The company said it is 'cautiously optimistic' about prospects for this year and beyond.

Banks and energy stocks are leading Europe’s main markets lower in midday trade, ending a five-day rise. BNP Paribas, France’s largest bank, Switzerland's Credit Suisse and Banco Santander are all among the main fallers.

Energy stocks, including Royal Dutch Shell and Total are down in line with the falling crude price. It has been announced today that Simon Henry will be the new chief financial officer at Royal Dutch Shell when he takes up his new position on 1 May.

He’ll move up from his current role as Executive Vice President Finance in Shell International Exploration to replace Peter Voser who’ll be the new chief executive as of 1 July.

Across the markets, the German DAX has dropped 61 points to 3,983, the French CAC is down 49 points at 2,742, while the Swiss market fell 35 points to 4,780.

German carrier Air Berlin said it is in advanced talks with travel company TUI Travel over a potential strategic cooperation for TUI's German charter airline TUIfly.

Under the planned deal, a group member company of TUI Travel will participate in Air Berlin with a minority interest which will not exceed 20%. Air Berlin would indirectly acquire a participation in the same percentage in TUIfly. Final approval of the TUI Travel and Air Berlin board was still outstanding, Air Berlin said.

Asia Markets

Financials prop up Asian markets for third day in succession

The major markets across the Asia-Pacific region advanced for the third day in succession on Tuesday led by financial stocks after Standard Chartered Bank plc, the second largest bank in the UK, joined the list of major banks reporting positive performance in the first two months of 2009. Expectations of stimulus from the BOJ, as well as indications of rate cuts by RBA as early as April, lifted sentiment across the markets overshadowing the weaker closing in the U.S market on Monday.

Crude oil traded modestly lower in Asian trading. Oil prices, which declined sharply following OPEC's decision not to change the output levels, rebounded on Monday on expectations that economic recovery might happen earlier than expected and closed at $47.35 after trading in a broad range of $43.62 to $47.63.

Commodity prices, measured by a group of six metals in the London Metals Exchange, gained 3% on Monday with April futures price in New York for copper surging up 5%. Resource related stocks advanced following higher prices.
The relief rally in the global markets seems to be losing steam after the markets discounted positive comments by officials of major banks such as Citigroup, JP Morgan, Bank of America and Barclays Bank that they expect positive results for the first quarter of 2009. Comments by Standard Chartered Bank, the second biggest bank in the UK, that it had a strong start to 2009, helped the banks rally for the fifth consecutive day.

The benchmark Nikkei 225 Index advanced 244.98 points or 3.18% to close at 7,949, while the broader Topix Index of all First Section issues gained 19.83 points to close at 762.

Japan's service sector output was up a seasonally adjusted 0.4% on month in January, the Ministry of Economy, Trade and Industry said on Tuesday, posting an index score of 106.4. The data came in sharply higher than analyst expectations for a 0.5% monthly decline following the revised 1.6% decline on month in December and the 1.1% fall in November.

Financial stocks advanced on expectations that the BOJ might announce new initiatives for stabilizing the banking sector and provide stimulus to the economy. Sumitomo Mitsui Financial soared 7.28% and Mitsubishi UFJ Financial advanced 6.35%. Mizuho Financial and Resona Holdings advanced 5.29% and 3.71% respectively.

Sumco Corp., the second largest manufacturer of silicon wafers in the world surged up more than 9% after brokerage firms, Nomura Holdings and KBC Securities, upgraded the stock to "buy" rating. Chipmakers Elpida Memory and Shin-Etsu Chemical also advanced.

Exporters posted gains helped by a weaker yen. Sony Corp advanced 4.13%, Canon gained 2.89% and Sharp ended up by 2.11%.

Automakers advanced after the Nikkei business daily reported that Toyota plans to slash the price of its current generation Prius hybrid car to 1.89 million yen from 2.33 million yen to match rival Honda's Insight. Toyota also plans to bring to market in 2011 a new hybrid that is more affordable than the Prius. Both Toyota Motor and Hondo Motor gained more than 3% each.

Hitachi said on Monday that it will spin off its money-losing automotive devices operations and digital consumer business and focus on heavy electric machinery, railway and social-infrastructure businesses in a bid to turn around its battered operations. The company also appointed the head of its plant technology firm as president of the parent company. The stock ended higher by 1.90%.

Oil-related stocks ended higher following the overnight gain in crude oil price. Nippon Oil advanced 4.47%, Inpex gained 2.80%, and Showa Shell rose 1.79%.

In Australia, the benchmark S&P/ASX200 Index advanced 103.50 points or 3.09% to close at 3,452, while the broader All Ordinaries Index gained 92 points, or 2.78% to close at 3,389.
The minutes of the recently concluded RBA meeting, in which the central bank paused, raised hopes that the RBA will cut interest rates as early as April to help the economy combat recession, which helped lift market sentiment despite lingering doubts about the global economic outlook. Economic data indicating a rise in lending by banks to corporate houses and households also generated some buying interest.

Commonwealth Bank of Australia advanced 4.84%; National Australia Bank rose 3.38%, Westpac Banking Group gained 3.08% and ANZ Bank added 2.42% during the day. Investment bank Macquarie Group soared 8.78%.

In the resources sector, index leader BHP Billiton rose 2.84% and Rio Tinto gained 2.36%. Gold

Among energy stocks, Santos advanced 3.09% and Woodside Petroleum added 1.86%, while Oil Search remained unchanged from previous close.

Airline stocks also advanced with Virgin Blue Holdings, which reported an increase in domestic and international traffic for January, advancing 7.07%, and Quantas Airways gaining more than 6%.

Retail stocks ended higher on positive sentiment across the markets. Wesfarmers advanced 3.77%, David Jones rose 2.02% and Woolworths gained 2.63%.

In Seoul, the benchmark KOSPI Index surged up more than 3.4% or 38.42 points to close 1,164, led by financials and foreign buying in select blue-chip stocks. The local currency continued to strengthen against the U.S green back, closing higher by 31.50 won at 1408.50.

Financials led the rally; Shinhan Financial surged up more than 9.5% and KB Financial, the holding firm of Kookmin bank, advanced 6.77%. Woori Finance ended higher by 7.26%.

Among the blue-chip stocks, Samsung Electronics added 2.1% and LG Electronics gained 2.94%.

Exporters advanced on the strengthening of the local currency. Among the automakers, Kia Motors soared 6.67% and Hyundai Motor advanced 2.64%. Ssangyong Motor gained 3.08%.

Shipbuilding stocks also gained with Hyundai Heavy Industries and Samsung Heavy Industries adding 5.28% and 5.30% respectively.

The stock market in Hong Kong ended lower on Tuesday, giving away most of the gains made intra-day, on profit booking and concerns about the global economic outlook.
The benchmark Hang Seng Index, which gained 450 points or 3.6% on Monday, closed at 12, 878, down 99 points or 0.76%.

Telecom stocks declined sharply; Hutchison Whimpoa is down 4.44% and China Mobile lost 3.59%.

Insurance stocks Ping An and China Life shed 4.73% and 4.94% respectively. China-related stocks also declined on profit taking. China Overseas declined 6.82%, while China Resources lost 2.21%.%. In the resource space, Aluminum Company of China decreased 3.42%, Petrochina lost 2.18% and CNOOC shed 0.56%.

Mixed trend was witnessed among utilities; While HK & China Gas declined 2.38%, HK Electric gained 2.60 Financial stocks also closed mixed. While HSBC Holdings gained 2.88%, Bank Comm advanced 0.59% and Hang Seng Bank added 0.64%, BOC Hong Kong declined 3.30%.

Among the other markets in the region, China's Shanghai Composite Index gained 3.02% or 65.04 points to 2,218 and Taiwan's Weighted Index advanced 1.41% or 70 points to 5,041. Indonesia's Jakarta Composite Index declined 0.96% or 12.76 points to 1,312 and Singapore's Strait Times Index declined 27.61 points to close at 1,559.

Commodities

Crude Oil Prices Move Higher Again

Crude oil prices gained again on Tuesday morning, adding to its recent surge. Traders are betting that an improved economic outlook will help energy demand.

Light sweet crude for April delivery rallied to $47.88, up 53 cents on the session. Earlier, oil reached a weekly intraday high of $48.20.

Traders looked ahead to the Energy Information Administration's inventory report on Wednesday. Last week, the EIA said crude oil inventories increased 749,000 barrels in the week ended March 6. This is a little higher than the expectations of economists, who were looking for a build of about 300,000 barrels.

On the economic front, the U.S. Labor Department revealed Tuesday that producer prices rose by 0.1 percent for February. This followed a rise of 0.8 percent in the previous month.

Economists had expected producer prices to rise by 0.4 percent.
Meanwhile, the Commerce Department reported that housing starts rose 22 percent to an annual rate of 583,000 in February from a revised January estimate of 477,000. Economists had expected starts to fall to 450,000 from the 466,000 originally reported for the previous month.

Oil prices turned higher on Monday as confidence in an economic turnaround out-weighed the Organization of Petroleum Exporting Countries' decision to leave output unchanged.

Light sweet crude for April delivery finished at $47.35 per barrel, up $1.10 for the day. Prices touched as high as $47.63 after earlier touching as low as $43.63.

OPEC decided Sunday to not reduce oil production below current levels, instead deciding to focus their efforts on getting member countries to abide by their current output quotas. The cartel's 152nd meeting was held in Vienna.

Stock Market News, Financial News - Mar 17, 2009

Govt says to meet direct tax collection goal

By Manoj Kumar

NEW DELHI (Reuters) - India expects to meet its downwardly revised direct tax collection target of 3.45 trillion rupees ($67 billion) for the 2008/09 fiscal year ending on March 31, a finance ministry official said on Tuesday.

"We are confident of meeting the target for 2008/09," the official, who declined to be named, told reporters.

In last month's interim budget for 2009/10, the finance ministry had revised down its forecast for direct tax receipts in 2008/09 to 3.45 trillion from 3.65 trillion, reflecting a slowdown in the economy.

The official said direct tax receipts between April 1, 2008, and March 16 rose 18 percent from a year ago to 2.96 trillion rupees, including advance taxes paid by the corporates for the fiscal fourth quarter.

The government has forecast the fiscal deficit at 6 percent of gross domestic product, much higher than an initial forecast of 2.5 percent, as growth slows to around 7 percent in 2008/09 from 9 percent a year earlier.

($1 = 51.4 rupees)

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Petronet may curb spot LNG deals

By Nidhi Verma

NEW DELHI (Reuters) - Petronet LNG may restrict its spot LNG purchases when domestic supplies get a boost from Reliance's massive new gas field that is expected to start production this month, the firm's CEO said.

Natural gas from Reliance Industries' D-6 field in the Bay of Bengal will eventually double India's supply of cleaner-burning fuel but the new supply is expected to dent India's demand for liquefied natural gas.  (More ...)

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Mercedes-Benz optimistic of maintaining growth

Despite the slowdown, luxury car maker Mercedes-Benz is optimistic of maintaining growth in the Indian market during the 2009 fiscal.

'We are optimistic that growth will continue, though it will not be 46 per cent as during the previous year, Suhas Kadlaskar, Director Corporate Affairs Mercedes-Benz India Private Ltd, said in Kochi.

The car maker had sold 3625 units nationally in 2008 and sales had registered a 14 per cent growth during February 2008 to February 2009 and the company hopes to maintain the market leadership this year too, he said.

In Kerala, Mercedes-Benz has grown by 20-25 per cent.  (More ...)

ADVFN World Daily Markets Bulletin - Mar 16, 2009

US Stocks at a Glance

Major Averages Remain Mixed In Mid-Morning Trading

Stocks are turning in a mixed performance in mid-morning trading on Monday, as traders react to Federal Reserve Chairman Ben Bernanke's 60 Minutes interview as well as some weaker than expected economic data.

In economic news, conditions for New York manufacturers got significantly worse in March, according to a report released by the New York Federal Reserve, with the index of activity in the state's manufacturing sector unexpectedly decreasing compared to the previous month.

Additionally, the Federal Reserve's industrial production report showed that industrial production fell by 1.4 percent in February compared to economists estimate of a 1.3 percent decline. The decrease reflected a steep drop in utilities output amid a swing to above-average temperatures.

In other news, Fed Chairman Ben Bernanke gave the first televised interview from a current Fed Chairman in 20 years. On 60 Minutes over the weekend, Bernanke reiterated that he sees the U.S. coming out of recession this year.

While he sees the recession ending before 2010, he noted that the unemployment rate would likely continue to climb, moving into double-digits before getting better. However, he pledged that another failure like Lehman Brothers would not be allowed to happen.

The major averages are currently stuck on opposite sides of the unchanged line, with the Nasdaq posting a notable loss. While the tech-heavy Nasdaq is down 9.77 at 1,421.73, the Dow is up 43.72 at 7,267.70 and the S&P 500 is up 6.48 at 763.03.

Canadian Market

Toronto Stocks Up For Fifth Straight Session - Canadian

Canadian stocks are in the green for a fifth straight session on Monday as strength in the mining and financial sectors has outweighed a drop in energy stocks.

The S&P/TSX Composite Index is up 63.03 points or 0.75% to 8,366.42. The index is on target for its best close in more than a month.

Mining stocks are up 3.25% to lead the way. Lundin Mining has rallied 6.7% after the company said it will remove its shares from from the New York Stock Exchange in a cost-cutting effort.

Financial stocks are up 2.8% as all of the big six banks are posting notable gains. Toronto-Dominion has climbed 3.5%, Scotiabank has added 3.3% and CIBC is up 3.2%.

Ensign Energy Services has declined 2.7% after the provider of energy drilling services reported fourth-quarter net income of C$73.83 million, or C$0.48 per share, compared with C$72.56 million, or C$0.48 per share, a year ago.

Energy stocks have dropped 0.5% as crude oil is down $1.63 to $44.62 after the Organization of Petroleum Exporting Countries agreed to leave output unchanged.

Enbridge is up 1.2% after the company said it agreed to sell its indirect 24.7% stake in the Oleoducto Central pipeline to Colombian oil and gas firm Ecopetrol SA for about US$400 million.

In other corporate news, Agrium is up 0.5%. The agricultural nutrients maker Monday said it commenced an exchange offer for all outstanding shares of CF Industries Holdings, Inc.

Sino-Forest Corp. is up 1% after the commercial forest plantation operator,reported fourth-quarter net income of $95.5 million or $0.51 per share, up from $55.5 million or $0.30 per share in the same period last year.

YM BioSciences Inc. is down 1.5%. The company announced the enrollment of the first patient into its multinational trial of nimotuzumab for the treatment of patients with non-small-cell lung cancer.

On Friday, the index added 21.12 points or 0.25% to end at 8,303.39. This marks the first finish above 8,300 since Feb. 17.

European Shares

FTSE hits new high for March
Market Movers
techMARK 1,145.85 +2.89%
FTSE 100 3,846.38 +2.47%
FTSE 250 6,278.27 +1.88%

The sun is shining on London’s leading stocks today with the FTSE 100 rising above the level it had sunk to at the end of February for the first time this month. Sentiment has been boosted by an interview given by Federal Reserve chairman Ben Bernanke on US TV Sunday night in which he said the US recession could end this year if the government’s medicine for the ailing banking sector works.

Barclays is sharply higher after it confirmed weekend reports that talks are underway with a number of parties over a sale of iShares, its exchange-traded funds business. The bank also confirmed it is holding talks with HM Treasury and FSA regarding its potential participation in the UK's Asset Protection Scheme. Barclays added that its businesses overall have had a strong start to 2009.

Rexam is another stock with a double-digit percentage rise under its belt after Credit Suisse upgraded the stock to “out-perform” from”neutral”.

Oil stocks are moderately lower after OPEC’s decision over the weekend not to cut output quotas. In contrast, heavy oil users such as Thomas Cook, British Airways and FirstGroup attract support on expectations that the OPEC decision will head off a resurgence in oil prices.

Rio Tinto is lower on weekend comment that some of its big shareholders are intent on scuppering the refinancing deal with Chinalco.

Bus and rail group Stagecoach's trading since the end of October has been on track to meet management expectations. The UK bus division has seen 9% like-for-like (LFL) revenue growth in the 44 weeks to 1 March 2009, while the UK rail division (excluding East Midlands Trains) saw 6.7% LFL growth. In North America, the company has seen 6.8% LFL growth in the 10 months to 28 February 2009.

Shares in industrial property group Brixton surged after the property group reassured the market it was compliant with its banking covenants at the end of 2008, despite a sharp deterioration in its financial position. The firm reported a pre-tax loss of £768.8m for the year, compared with a profit of £58.2m the previous year. Net asset value per share fell 47% to 290p.

Many market observers were expecting Brixton to accompany its results with a rights issue or some other form of fund raising but the company said it was still considering a wide variety of options aimed at strengthening its balance sheet.

Insulation and building materials supplier SIG is another company considering a range of options, including a potential equity raising. Reports at the weekend suggested SIG had spoken to investors about a possible £250m-£300m rights issue at a heavy discount to the current share price. Full-year results are due tomorrow, though it is unclear if a cash call will accompany the figures.

A consortium led by Interserve has been named as Selected Bidder by Sandwell Council for a big schools development project under the government’s Building Schools for the Future initiative.

Gulf of Mexico-focused oil and gas explorer and producer Leed Petroleum posted a large increase in production over 2008 and said it was in a strong position to continue growing. The firm posted a pre-tax income of $3.6m on revenues of $15.1m, as it ramped up production at its Eugene Island field.

Hopes of a big contract for Aero Inventory have been dashed as the company said it had withdrawn from discussions with a major airline having been unable to agree on satisfactory commercial terms for the proposed deal.

Emerald Energy, the oil explorer focused on South America and the Middle East, is awash with cash after a strong trading performance in 2008. Net cash flow from operations tripled to $64.7m from $21.6m in 2007. Cash and cash equivalents at the end of 2008 stood at $74m, up from $40m at the end of 2007, after the company saw profit before tax soar from 2007’s level of $8.59m to $52.45m.

FTSE 100 - Risers
Barclays (BARC) 89.70p +21.05%
Rexam (REX) 269.75p +12.75%
Prudential (PRU) 287.75p +10.35%
London Stock Exchange Group (LSE) 449.25p +9.24%
Thomas Cook Group (TCG) 229.00p +7.64%

FTSE 100 - Fallers
Tullow Oil (TLW) 762.00p -1.68%
Kazakhmys (KAZ) 318.50p -1.55%
Amec (AMEC) 540.50p -1.10%
Rio Tinto (RIO) 2,060.00p -0.82%
RSA Insurance Group (RSA) 135.00p -0.74%

FTSE 250 - Risers
Brixton (BXTN) 17.50p +18.64%
SIG (SHI) 135.50p +15.32%
Intermediate Capital Group (ICP) 228.00p +11.76%

FTSE 250 - Fallers
Gem Diamonds (GEMD) 155.00p -3.73%
Wellstream Holdings (WSM) 388.25p -3.54%
Brit Insurance Holding (BRE) 188.50p -3.33%

Asia Markets

Indian market continues winning streak

Monday, the Indian market recovered from its day's lows to end sharply higher for the day. While easing fears about the U.S. banks and net buying by foreign funds on Friday helped the market open firm, investors took profits in early trading amid a mixed trend in the Asian markets and an uncertain outlook for the global economy.

However, stocks bounced back later in the afternoon after the European markets opened on a positive note. The higher US index futures, which pointed towards a firm opening on Wall Street Monday and the strengthening of the rupee to near a two-week high also improved investor sentiment.

The BSE Sensex opened at 8,794 and slipped to the day's low of 8,697 in early trading. The index since then bounced back sharply and closed near the day's high at 8,944, up 187 points or 2.13% over the previous close. Meanwhile, the S&P CNX Nifty rose 58 points or 2.13% to 2,777.

Second-line stocks also showed significant gains. The broad-based BSE 500 index, the small-cap and the mid-cap indexes advanced around 2.20% each. On the BSE, the market breadth was extremely positive, with gainers outnumbering decliners by 1611 to 847.

Stocks across the sectors received good support. Realty, oil/gas and banking stocks were the top gainers.

Jaiprakash Associates (up 8.96%), Mahindra & Mahindra (up 8.48%), Ranbaxy Laboratories (up 6.82%), Reliance Communication (up 6.74%), DLF (up 6.16%), ICICI Bank (up 4.52%), State Bank of India (up 3.65%)and Sterlite Industries (up 3.52%) were some of the prominent gainers.

Twenty-five out of 30 Sensex stocks finished in positive territory, while Sun Pharma, Maruti Suzuki, Grasim Industries, Infosys and Reliance Infrastructure ended in the red.

Aviation stocks surged higher after data released by the Civil Aviation Ministry showed a marginal improvement in domestic passengers traffic for February. Kingfisher climbed 9.83%, JetAirways jumped 17.16% and SpiceJet gained 3.15%.

Realty stocks showed handsome gains, leading the rally. Among the major gainers in this space, Mahindra Life jumped 22.03%, Akruti City soared 19.50%, Parsvnath climbed 6.17% and DLF added 6.16%.

Stocks of oil-exploration companies closed mixed after crude oil price fell about 2.5 percent in Asian trading on Monday. Reliance Industries gained 3.45% and ONGC advanced 1.32%, but Cairn moved down 0.21%.

On the other hand, state-owned oil firms, namely HPCL surged up 8.30%, BPCL jumped 4.40% and IOC added 2.96%.

Commodities

Oil falls by nearly $1 a barrel
Crude oil futures fell nearly $1 on speculation that oil cartel OPEC will not announce further output cuts at its weekend meeting in Vienna.

Reports suggest OPEC is under pressure to keep oil prices lower to help an economic recovery. Since September the group, which controls about a third of the world’s oil production, has reduced production by 4.2m in an attempt to stem falling oil prices.

According to reports the group has an 81% compliance rate of reaching its reduction target.

US light crude oil for April delivery fell 78 cents to settle at $46.25 a barrel on the New York Mercantile Exchange. In a volatile week for oil prices crude registered gains of 1.6%.

Gold prices rose above $930 an ounce amid strong demand for ETF holdings. The precious metal has endured a bumpy ride in recent weeks with prices rising above $1,000 an ounce and then falling quickly to profit taking.

Traders say demand for gold will slow as it inches towards the $1,000 level again and as demand for safe haven assets eases as investors reassess the economic outlook. COMEX gold for April delivery rose $6.10 to settle at $930.10 an ounce.

Silver for May delivery rose 27 cents to $13.22 an ounce while April platinum advanced 40 cents to $1,063.60 an ounce.

Forex

Euro broadly higher
Demand for the dollar’s safe haven qualities faded on Friday with renewed risk appetite boosting the euro and sterling.

The single market currency also benefited from Thursday’s decision from the Swiss central bank to stop the Swiss franc's advance against the euro.

The euro consolidated gains against the greenback on Friday and early in the session hit a two-week high against the dollar before easing slightly. The euro also gained around 0.4% to 126.43 yen.

The euro has recently been under pressure by concern about the euro zone’s exposure to bad debt in Eastern European banks.

The dollar rose against the broadly weaker Japanese currency after a report showed the US trader gap narrowed to its smallest level since October 2002. The yen’s attractiveness as a safe haven currency has been fading as traders mull the country’s deepening economic troubles.

Sterling took its cue from buoyant markets on Friday and investors turned to riskier currencies. The pound rose about 0.50% to $1.4005 after reaching a six-week low against the US currency earlier in the week at $1.3653.

The UK currency was also boosted as the Bank of England continues will its quantitative easing plans, which is hoped will stimulate lending.