Reports » India
Indian stock market and companies daily report (December 17, 2013, Tuesday)
Indian markets are expected to open in the green today tracking a positive opening in SGX Nifty and most of the other Asian markets which are also trading in the positive territory.
The US markets after showing a notable move to the downside last week regained some ground during trading on Monday. While buying interest waned after an initial rally, the markets maintained a positive bias throughout the trading session. The major averages moved roughly sideways throughout the afternoon, holding on to strong gains. The European markets ended the first session of the new trading week in positive territory, snapping a 4-day losing streak. Sentiment was influenced by data which showed that Germany's manufacturing purchasing managersRs. index increased in December to the highest level in thirty months
Indian markets fell slightly on Monday after government data showed India's wholesale price index for November shot up to a 14-month high of 7.52% from 7% in the previous month, adding pressure on the Reserve Bank of India to raise interest rates at its upcoming policy meeting on Wednesday
The trend deciding level for the day is 20,687 / 6,161 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 20,737 - 20,814 / 6,1 77 - 6,199 levels. However, if NIFTY trades below 20,687 / 6,161 levels for the first half-an-hour of trade then it may correct up to 20,61 0 - 20,561 / 6,139 - 6,124 levels.
WPI inflation surprises negatively
The Wholesale Price Index (WPI) based inflation surprised negatively during November 2013 by coming in at 7.52% higher than market expectations of 7.00%. The headline print edged higher as compared to inflation hovering at about 7.00% in three preceding months and 7.24% in November 2012. During the month, inflation across major components - primary articles, fuel and power and manufactured products has witnessed an uptick as compared to that in the previous month. Food inflation persisted at an uncomfortably high level of 19.93%, a 41-month high owing to elevated vegetable prices for the fifth straight month. Inflation for September 2013 has been revised higher to 7.05% from 6.46% reported earlier on upward revision across the major components. We expect the RBI to hike its policy rate by 25bp in the upcoming policy review on December 18 in light of its continued focus on restraining inflation and anchoring inflationary expectations.
Primary articles - weightage 20.1%
During November 2013 primary articles reported inflation at 15.92% as compared to 14.68% in October 2013 and 9.56% in the corresponding period of the previous year. The rise can be attributed mainly to higher food inflation led by elevated vegetable prices for the fifth straight month. Also, the non-food primary articles component reported an increase in inflation to 7.60% from 6.79% in the previous month. Inflation in minerals eased from 7.03% in October 2013 to 6.09% during November 2013. Food articles: Food inflation surged to 19.93%, a 41-month high as compared to 18.19% in the previous month and 8.80% in November 2012. Vegetable inflation came in at a whopping 95.25% as compared to 78.38% in the previous month but it is expected to cool down going forward and provide some respite to headline food inflation.
Fuel and power - weightage 14.9%
Inflation in fuel and power came in at 11.08% as compared to 10.33% in the previous month. This rise can be attributed largely to higher inflation in mineral oils such as diesel and LPG in particular.
Manufactured products - weightage 65.0%
Inflation in manufactured products came in higher at 2.64% as compared to 2.50% in October 2013. Core inflation came in higher at 2.63% as compared to 2.58% in the previous month, while manufactured food inflation also edged higher. Although marginal, the uptick in core inflation suggests a pass through of higher input costs in manufacturing sector despite weak pricing power.
Coal India's subsidiary WCL raises coal prices
Media report suggests that Coal India's fully-owned subsidiary, Western Coalfields has raised the prices of coal by ~10%. The company expects Coal India's annual revenues to increase by Rs.150-Rs.200cr on account of the price increase, which is likely to have a modest impact on the company's profitability. However, the company's Board has deferred decision on special dividend. We maintain our Neutral rating on the stock.
Economic and Political News
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- Duty refund claims touch Rs.4,800cr; impacting exports: FIEO
- Power rates may go up in Uttarakhand
- THDC signs initial pact with UPSIDC for Khurja power plant
- Spice Jet, Tiger Air sign 3-year interline agreement
- Swan Energy gets green nod for LNG terminal at Pipavav
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