The U.S. lost jobs for a third consecutive month in March and the unemployment rate rose to the highest level since September 2005, pointing to an economy that may already be in a recession.
Payrolls shrank by 80,000, more than forecast, after a decrease of 76,000 in February that was more than initially reported, the Labor Department said today in Washington. The jobless rate rose to 5.1 percent from 4.8 percent.
Job losses have shaken consumer confidence, contributing to a weakening in spending that has almost stalled growth. The report reinforces forecasts that the Federal Reserve, whose Chairman Ben S. Bernanke this week acknowledged the economy may face a recession, will need to do more to prevent further deterioration.
``You can pretty much write off the next few months of consumer and labor-market data,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, who had forecast a job decline of 75,000. ``The weakness is feeding on itself. Job cuts are leading to weaker consumer spending, which will in turn lead to more job cuts.''
Treasuries climbed after the release, with 10-year note yields falling to 3.53 percent at 8:34 a.m. in New York, from 3.59 percent late yesterday. Traders raised bets on a half-point interest-rate cut by the Fed this month, with the odds of such a move rising to 38 percent from 20 percent yesterday, futures show.
Economists' Estimates
Economists had projected payrolls would fall by 50,000 following a previously reported 63,000 drop in February, according to the median of 79 forecasts in a Bloomberg News survey. Economists' forecasts ranged from a decline of 150,000 to a gain of 65,000.
Revisions subtracted 67,000 jobs from the originally reported figures for January and February. The last time the economy lost jobs for at least three consecutive months coincided with the start of the Iraq War in 2003.
The jobless rate was forecast to rise to 5 percent from 4.8 percent in February, the survey said.
Factory payrolls shrank by 48,000 workers, the biggest decrease since July 2003, Labor said. The drop included a loss of 24,000 jobs in the auto manufacturing and parts industries, which the government said ``largely'' reflected a the effects of strike at a supplier for General Motors Corp. Economists had forecast a decline of 35,000 in manufacturing jobs.
American Axle
A walkout by workers at American Axle & Manufacturing over pay and benefits that started on Feb. 26 has idled almost half of GM's North American workforce.
Ford Motor Co., which lost $15.3 billion in the past two years, may cut more jobs in North America, Chief Executive Officer Alan Mulally said last month.
``We must continue to downsize and simply will not have enough jobs for all of our current hourly workers,'' Joe Hinrichs, Ford's manufacturing chief, and Marty Mulloy, vice president of labor affairs, said in a March 19 commentary sent to newspapers in communities where Ford has plants.
Builders eliminated 51,000 jobs after a decline of 37,000 in February.
Service industries, which include banks, insurance companies, restaurants and retailers, added 13,000 workers last month after an increase of 6,000 in February, the report showed. Retail payrolls decreased by 12,400 after dropping 46,700 in February.
Finance Jobs
Payrolls at financial firms decreased by 5,000 jobs, after declining 11,000 the prior month, Labor said.
Job losses in financial markets are mounting following the collapse in subprime lending.
Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001, according to the Securities Industry and Financial Markets Association.
This year, financial firms including Lehman Brothers Holdings Inc., Citigroup Inc. and Morgan Stanley have reduced staff in fixed income trading, securitization and investment banking. Lehman has eliminated 18 percent of its workforce, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.
The average work week lengthened to 33.8 hours from 33.7 hours. Average weekly hours worked by production workers increased to 41.3 from 41.2, while overtime increased to 4.1 hours from 4 hours. That brought average weekly earnings up by $3.47 to $603.67 last month.
Hourly Wages
Workers' average hourly wages rose in line with forecasts to $17.86, up 5 cents, or 0.3 percent. Hourly earnings were 3.6 percent higher than a year earlier. Economists surveyed by Bloomberg had forecast a 0.3 percent increase from the prior month and a 3.6 percent gain for the 12-month period.
Americans, whose spending accounts for more than two-thirds of the economy, are less upbeat about finding work, a Conference Board report showed last week. The share of consumers who said jobs are plentiful fell and the proportion who said jobs are hard to get jumped, pushing consumer confidence down to a five- year low in March.
More and more economists are forecasting a recession as job, retail-sales and manufacturing data have deteriorated this year. Martin Feldstein, the Harvard economics professor who heads the research group that determines when downturns begin, said last month that a contraction had begun.
Bernanke Outlook
``It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,'' Bernanke said in testimony to Congress on April 2. He said he expected unemployment to move ``somewhat higher,'' in line with recent data showing a ``softer labor market.''
Seeking to improve the flow of credit, restore confidence to financial markets and cushion the slowdown, the Fed on March 18 lowered its key rate by three-quarters of a point and vowed to act ``as needed'' to cushion the economy. The Fed has cut the benchmark rate by 3 percentage points since September.
Investors are betting the central bank will need to lower the rate again when it next meets on April 30.
Friday, April 04, 2008
Markets plunge; Inflation at 3-yr high - 7%
The markets have taken a knock back approach after inflation numbers announcement, which are high by quite a percentage points as against earlier numbers of 6.68%. Today it touched a 7% mark, which is ahead of markets expecations of 6.52%. Capital Goods, technology, auto, banking, power and telecom stocks have hit hard. Market breadth is negaitve with ratio of 1:3 as 318 shares have advanced while 900 shares declined.
At 12.02 hrs IST, the Sensex was down 239.71 points or 1.51% at 15592.84, and the Nifty down 70.35 points or 1.47% at 4701.25. About 1267 shares have advanced, 1710 shares declined, and 94 shares are unchanged.
BHEL, HDFC, L&T and M&M were top losing counters while gainers - Ranbaxy, HUL, Tata Steel and Hero Honda gainers.
Finally, inflation has hit 7% mark today for the week ended March 22 as against 6.68% in the previous week. Vegetable prices went up 4.9%, primary articles WPI up 1.8%, minerals WPI up 38.2% and metallic minerals WPI up 42.8%.
Midcap and small cap stocks have slipped further. Reliance Petro, BHEl, Tulsi Extrusion and Reliance Industries were most active counters.
Market cues:
FIIs net sell $5 mn in equity on Apr 2
MFs net sell Rs 128 cr in equity on Apr 2
NSE F&O Open Int up Rs 1,173 cr at Rs 52,414 cr
Reports suggest govt weighs price cap on key items to curb inflation
F&O cues:
Futures Open Interest up by Rs 193 crore and Options Open Interest up by Rs 980 crore
Nifty Futures shed 5 lakh shares in Open Interest; at 13-point premium
Nifty Open Interest Put-Call ratio at 1.26 Vs 1.25
Nifty Puts add 10.8 lakh shares in Open Interest
Nifty Calls add 7.7 lakh shares in Open Interest
Nifty 4700 Put adds 2.5 lakh shares in Open Interest
Nifty 4400 Put adds 2.1 lakh shares in Open Interest
Nifty 5000 Call adds 2.2 lakh shares in Open Interest
Nifty 4800 Call adds 1.5 lakh shares in Open Interest
Stock Futures add 1 cr shares in Open Interest
At 12.02 hrs IST, the Sensex was down 239.71 points or 1.51% at 15592.84, and the Nifty down 70.35 points or 1.47% at 4701.25. About 1267 shares have advanced, 1710 shares declined, and 94 shares are unchanged.
BHEL, HDFC, L&T and M&M were top losing counters while gainers - Ranbaxy, HUL, Tata Steel and Hero Honda gainers.
Finally, inflation has hit 7% mark today for the week ended March 22 as against 6.68% in the previous week. Vegetable prices went up 4.9%, primary articles WPI up 1.8%, minerals WPI up 38.2% and metallic minerals WPI up 42.8%.
Midcap and small cap stocks have slipped further. Reliance Petro, BHEl, Tulsi Extrusion and Reliance Industries were most active counters.
Market cues:
FIIs net sell $5 mn in equity on Apr 2
MFs net sell Rs 128 cr in equity on Apr 2
NSE F&O Open Int up Rs 1,173 cr at Rs 52,414 cr
Reports suggest govt weighs price cap on key items to curb inflation
F&O cues:
Futures Open Interest up by Rs 193 crore and Options Open Interest up by Rs 980 crore
Nifty Futures shed 5 lakh shares in Open Interest; at 13-point premium
Nifty Open Interest Put-Call ratio at 1.26 Vs 1.25
Nifty Puts add 10.8 lakh shares in Open Interest
Nifty Calls add 7.7 lakh shares in Open Interest
Nifty 4700 Put adds 2.5 lakh shares in Open Interest
Nifty 4400 Put adds 2.1 lakh shares in Open Interest
Nifty 5000 Call adds 2.2 lakh shares in Open Interest
Nifty 4800 Call adds 1.5 lakh shares in Open Interest
Stock Futures add 1 cr shares in Open Interest
No-delivery period. Ex-dividend & Ex-date
What is a No-delivery period?
Whenever a company announces a book closure or record date, the exchange sets up a no-delivery period for that security. During this period only trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.
What is an Ex-dividend date?
The date on or after which a security begins trading without the dividend included in the price, i.e. buyers of the shares will no longer be entitled for the dividend which has been declared recently by the company, in case they buy on or after the ex-dividend date.
What is an Ex-date?
The first day of the no-delivery period is the ex-date. If there is any corporate benefits such as rights, bonus, dividend announced for which book closure/record date is fixed, the buyer of the shares on or after the ex-date will not be eligible for the benefits.
Whenever a company announces a book closure or record date, the exchange sets up a no-delivery period for that security. During this period only trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.
What is an Ex-dividend date?
The date on or after which a security begins trading without the dividend included in the price, i.e. buyers of the shares will no longer be entitled for the dividend which has been declared recently by the company, in case they buy on or after the ex-dividend date.
What is an Ex-date?
The first day of the no-delivery period is the ex-date. If there is any corporate benefits such as rights, bonus, dividend announced for which book closure/record date is fixed, the buyer of the shares on or after the ex-date will not be eligible for the benefits.
MARKET UPDATES
Russian economic growth was 6.2 per cent in year-on-year terms in March, unchanged from the previous month, VTB bank's GDP indicator showed on Friday.
Asian markets declined in the initial session of trade on Friday (Apr. 04, 2008) first time in three days. The fall was led by technology companies and automakers, after a US jobs report showed that the growth is slowing down.
Reliance Energy buys-back shares worth Rs 1.74 bn
BSE to launch Sensex futures on US bourse today.
Bharti Airtel, Reliance Communications (RCom), Tata Communications and BSNL will invest over USD 4 billion, in total, over the next two years to build new undersea links.
Colgate Palmolive India acquired 75% shareholding in CC Health Care Products, Hyderabad which is engaged in the manufacture of toothpowder.
Government is likely to discontinue the 10% levy mechanism on sugar.
The government will not be reducing its stake from the level of 51% in the public sector banks.
The government buys 10% of the total production from millers at lower price and distributes it to poor at a subsided rate. The government may discontinue 10% levy mechanism because of which the millers will able to sell entire quantity in domestic market as well as in international market.
DLF signed management agreements with Hilton Hotels Corporation involving seven new hotel developments in the pipeline.
NABARD estimates Rs 134.97 bn loan waiver in Maharashtra.
Asian markets declined in the initial session of trade on Friday (Apr. 04, 2008) first time in three days. The fall was led by technology companies and automakers, after a US jobs report showed that the growth is slowing down.
Reliance Energy buys-back shares worth Rs 1.74 bn
BSE to launch Sensex futures on US bourse today.
Bharti Airtel, Reliance Communications (RCom), Tata Communications and BSNL will invest over USD 4 billion, in total, over the next two years to build new undersea links.
Colgate Palmolive India acquired 75% shareholding in CC Health Care Products, Hyderabad which is engaged in the manufacture of toothpowder.
Government is likely to discontinue the 10% levy mechanism on sugar.
The government will not be reducing its stake from the level of 51% in the public sector banks.
The government buys 10% of the total production from millers at lower price and distributes it to poor at a subsided rate. The government may discontinue 10% levy mechanism because of which the millers will able to sell entire quantity in domestic market as well as in international market.
DLF signed management agreements with Hilton Hotels Corporation involving seven new hotel developments in the pipeline.
NABARD estimates Rs 134.97 bn loan waiver in Maharashtra.
U.S. Probably Lost Jobs for Third Month as Economy Weakened
The U.S. lost jobs for a third consecutive month in March and the unemployment rate rose, signs the economy continues to turn down, economists said before a report today.
Payrolls shrank by 50,000 workers, according to the median estimate of 79 economists surveyed by Bloomberg News before the Labor Department's report. The jobless rate rose to 5 percent from 4.8 percent in February, the survey also showed.
Job losses have shaken consumer confidence, contributing to a weakening in spending that has almost stalled growth. The report reinforces forecasts the Federal Reserve, whose Chairman Ben S. Bernanke this week acknowledged the economy may face a recession, will need to do more to prevent further deterioration.
``Whatever way you slice it, the labor market doesn't feel good for the average person,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York. ``You're seeing the weakness spread more broadly. It's not an abysmal outlook, but it is quite weak.''
Projections in the Bloomberg survey ranged from a decline of 150,000 jobs to a gain of 65,000. The report is due in Washington at 8:30 a.m.
The drop in payrolls would follow a 63,000 decline in February. The last time employment fell for at least three consecutive months coincided with the start of the Iraq War in 2003.
Initial claims for jobless benefits, which track firings, rose last week to the highest level since the aftermath of Hurricane Katrina in September 2005, the Labor Department said yesterday. Payrolls tend to drop as claims rise.
Factory Payrolls
Manufacturers eliminated 35,000 jobs in March, reflecting automakers' efforts to trim costs and the effects of a strike at a supplier for General Motors Corp., economists project the report may show. The last time factories added workers was in June 2006.
A walkout by workers at American Axle & Manufacturing over pay and benefits that started on Feb. 26 has idled almost half of GM's North American workforce. The payroll figures may be reduced by as much as 20,000 workers because of the effects of the strike, according to Morgan Stanley economist David Greenlaw.
Ford Motor Co., which lost $15.3 billion in the past two years, may cut more jobs in North America, Chief Executive Officer Alan Mulally said last month.
``The old ways of doing business are gone,'' Joe Hinrichs, Ford's manufacturing chief, and Marty Mulloy, vice president of labor affairs, said in a March 19 commentary sent to newspapers in communities where Ford has plants. ``We must continue to downsize and simply will not have enough jobs for all of our current hourly workers.''
Subprime's Influence
Job losses in financial markets are also mounting following the collapse in subprime lending.
Wall Street banks affected by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001, according to the Securities Industry and Financial Markets Association.
This year, financial firms including Lehman Brothers Holdings Inc., Citigroup Inc. and Morgan Stanley have reduced staff in fixed-income trading, securitization and investment banking. Lehman has eliminated 18 percent of its workforce, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.
More and more economists are forecasting a recession as job, retail-sales and manufacturing data have deteriorated this year. Martin Feldstein, the Harvard economics professor who heads the research group that determines when downturns begin, said last month that a contraction had started.
Bernanke's View
``It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,'' Bernanke said in testimony to Congress on April 2. He said he expected unemployment to move ``somewhat higher,'' in line with recent data showing a ``softer labor market.''
Seeking to ease credit, restore confidence to financial markets and cushion the slowdown, the Fed on March 18 lowered its key rate by three-quarters of a point and vowed to act ``as needed'' to cushion the economy. The Fed has cut the benchmark rate by 3 percentage points since September.
Investors are betting the central bank will need to lower the rate again when it next meets on April 30.
Payrolls shrank by 50,000 workers, according to the median estimate of 79 economists surveyed by Bloomberg News before the Labor Department's report. The jobless rate rose to 5 percent from 4.8 percent in February, the survey also showed.
Job losses have shaken consumer confidence, contributing to a weakening in spending that has almost stalled growth. The report reinforces forecasts the Federal Reserve, whose Chairman Ben S. Bernanke this week acknowledged the economy may face a recession, will need to do more to prevent further deterioration.
``Whatever way you slice it, the labor market doesn't feel good for the average person,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York. ``You're seeing the weakness spread more broadly. It's not an abysmal outlook, but it is quite weak.''
Projections in the Bloomberg survey ranged from a decline of 150,000 jobs to a gain of 65,000. The report is due in Washington at 8:30 a.m.
The drop in payrolls would follow a 63,000 decline in February. The last time employment fell for at least three consecutive months coincided with the start of the Iraq War in 2003.
Initial claims for jobless benefits, which track firings, rose last week to the highest level since the aftermath of Hurricane Katrina in September 2005, the Labor Department said yesterday. Payrolls tend to drop as claims rise.
Factory Payrolls
Manufacturers eliminated 35,000 jobs in March, reflecting automakers' efforts to trim costs and the effects of a strike at a supplier for General Motors Corp., economists project the report may show. The last time factories added workers was in June 2006.
A walkout by workers at American Axle & Manufacturing over pay and benefits that started on Feb. 26 has idled almost half of GM's North American workforce. The payroll figures may be reduced by as much as 20,000 workers because of the effects of the strike, according to Morgan Stanley economist David Greenlaw.
Ford Motor Co., which lost $15.3 billion in the past two years, may cut more jobs in North America, Chief Executive Officer Alan Mulally said last month.
``The old ways of doing business are gone,'' Joe Hinrichs, Ford's manufacturing chief, and Marty Mulloy, vice president of labor affairs, said in a March 19 commentary sent to newspapers in communities where Ford has plants. ``We must continue to downsize and simply will not have enough jobs for all of our current hourly workers.''
Subprime's Influence
Job losses in financial markets are also mounting following the collapse in subprime lending.
Wall Street banks affected by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001, according to the Securities Industry and Financial Markets Association.
This year, financial firms including Lehman Brothers Holdings Inc., Citigroup Inc. and Morgan Stanley have reduced staff in fixed-income trading, securitization and investment banking. Lehman has eliminated 18 percent of its workforce, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.
More and more economists are forecasting a recession as job, retail-sales and manufacturing data have deteriorated this year. Martin Feldstein, the Harvard economics professor who heads the research group that determines when downturns begin, said last month that a contraction had started.
Bernanke's View
``It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,'' Bernanke said in testimony to Congress on April 2. He said he expected unemployment to move ``somewhat higher,'' in line with recent data showing a ``softer labor market.''
Seeking to ease credit, restore confidence to financial markets and cushion the slowdown, the Fed on March 18 lowered its key rate by three-quarters of a point and vowed to act ``as needed'' to cushion the economy. The Fed has cut the benchmark rate by 3 percentage points since September.
Investors are betting the central bank will need to lower the rate again when it next meets on April 30.
SEBI NEW MOVE
The Securities and Exchange Board of India (Sebi) has allowed brokers to offer their institutional clients direct access to the exchange trading system through the brokers’ infrastructure.
Called the direct market access (DMA) facility, this allows clients anywhere in the world to access the broker’s trading platform without any manual intervention.
The DMA facility offers advantages such as direct control of clients over orders, faster execution of client orders, reduced risk of errors associated with manual order entries, greater transparency, increased liquidity, lower impact costs for large orders, better audit trails and better use of hedging and arbitrage opportunities through the use of decision support tools/algorithms for trading.
Brokers must specifically authorise clients for providing the DMA facility after fulfilling the Know Your Client (KYC) requirements. Brokers have been made liable for all DMA trades and must authorise individual users at the client end based on minimum criteria.
They will also maintain the records of user details, user-ID and authorisation. brokers interested in offering the DMA facility will have to apply to stock exchanges giving details of software and systems proposed to be used, which will be duly certified by a security auditor as reliable, said the circular.
The broker will enter into a specific agreement with the clients for whom they permit the DMA facility, which will clearly state that the client will use the DMA facility only to execute his own trades and will not use it for transactions on behalf of any other person/entity.
The agreement will further include a clause, saying that the broker has the right to withdraw the DMA facility if the limits set up are breached or for any other such concerns.
Further, the client shall also agree to be bound by the various limits that the broker shall impose for usage of the DMA facility. Sebi has directed the exchanges to prepare a model agreement.
Based on risk assessment, credit quality and available margins of the client, the broker will ensure that trading limits/exposure limits/position limits are set for all DMA clients.
Brokers must ensure that all DMA orders are routed through electronic/automated risk management systems of the broker to carry out appropriate validation of all risk parameters such as quantity limits, price range checks, order value and credit checks before the orders are released to the exchange.
“All the DMA orders are subject to order quantity/order value limit in terms of price and quantity specified for the client. All the position limits, which are specified in the derivatives segment as applicable. Net position that can be outstanding so as to fully cover the risk emanating from the trades with the available margins of the specific client. Appropriate limits for securities which are subject to FII limits as specified by RBI,” said the circular.
Brokers who are interested in offering the facility must apply to the stock exchanges giving details of the software and systems proposed to be used, which shall be duly certified by a security auditor as reliable.
Brokers point out that it is a welcome move as most markets in the world have made direct market access available to institutional clients.
Called the direct market access (DMA) facility, this allows clients anywhere in the world to access the broker’s trading platform without any manual intervention.
The DMA facility offers advantages such as direct control of clients over orders, faster execution of client orders, reduced risk of errors associated with manual order entries, greater transparency, increased liquidity, lower impact costs for large orders, better audit trails and better use of hedging and arbitrage opportunities through the use of decision support tools/algorithms for trading.
Brokers must specifically authorise clients for providing the DMA facility after fulfilling the Know Your Client (KYC) requirements. Brokers have been made liable for all DMA trades and must authorise individual users at the client end based on minimum criteria.
They will also maintain the records of user details, user-ID and authorisation. brokers interested in offering the DMA facility will have to apply to stock exchanges giving details of software and systems proposed to be used, which will be duly certified by a security auditor as reliable, said the circular.
The broker will enter into a specific agreement with the clients for whom they permit the DMA facility, which will clearly state that the client will use the DMA facility only to execute his own trades and will not use it for transactions on behalf of any other person/entity.
The agreement will further include a clause, saying that the broker has the right to withdraw the DMA facility if the limits set up are breached or for any other such concerns.
Further, the client shall also agree to be bound by the various limits that the broker shall impose for usage of the DMA facility. Sebi has directed the exchanges to prepare a model agreement.
Based on risk assessment, credit quality and available margins of the client, the broker will ensure that trading limits/exposure limits/position limits are set for all DMA clients.
Brokers must ensure that all DMA orders are routed through electronic/automated risk management systems of the broker to carry out appropriate validation of all risk parameters such as quantity limits, price range checks, order value and credit checks before the orders are released to the exchange.
“All the DMA orders are subject to order quantity/order value limit in terms of price and quantity specified for the client. All the position limits, which are specified in the derivatives segment as applicable. Net position that can be outstanding so as to fully cover the risk emanating from the trades with the available margins of the specific client. Appropriate limits for securities which are subject to FII limits as specified by RBI,” said the circular.
Brokers who are interested in offering the facility must apply to the stock exchanges giving details of the software and systems proposed to be used, which shall be duly certified by a security auditor as reliable.
Brokers point out that it is a welcome move as most markets in the world have made direct market access available to institutional clients.
MARKET PREDICTION
GLOBAL MARKETS ARE MIXED.
INDIA WILL FOLLOW THE SAME STEP.
OI IS CREEPING UP A BIT TO 52K CR & PUT CALL RATIO IS ALSOMST SAME 1.26%.
LEVEL TO BE WATCH OUT 4730 IS MAIN SUPPORT LEVEL 4750-4800-4850.
BELOW 4730 WE CAN ASSUME SHORT WITH A TARGET OF 4620.
SECTORS TO BE WATCH OUT ENERGY AND FMCG.
NTPC AND POWERGRID IN ENERGY
ITC & HUL TO BE WATCHED OUT.
IN CASE MARKET BREEZE 4730 GO SHORT METAL AND BANKING SPACE.
FII ARE NET SELLER IN NEW FINANCIAL YEAR YET.
HAVE A NICE TRADING DAY......
-MR.SAM
INDIA WILL FOLLOW THE SAME STEP.
OI IS CREEPING UP A BIT TO 52K CR & PUT CALL RATIO IS ALSOMST SAME 1.26%.
LEVEL TO BE WATCH OUT 4730 IS MAIN SUPPORT LEVEL 4750-4800-4850.
BELOW 4730 WE CAN ASSUME SHORT WITH A TARGET OF 4620.
SECTORS TO BE WATCH OUT ENERGY AND FMCG.
NTPC AND POWERGRID IN ENERGY
ITC & HUL TO BE WATCHED OUT.
IN CASE MARKET BREEZE 4730 GO SHORT METAL AND BANKING SPACE.
FII ARE NET SELLER IN NEW FINANCIAL YEAR YET.
HAVE A NICE TRADING DAY......
-MR.SAM
RBI lets Mutual Funds invest $7 bn abroad
Asset management companies will now be allowed to invest $7 billion abroad, with the Reserve Bank of India relaxing norms relating to overseas investment by mutual funds. The move is in line with the central bank’s stated policy of encouraging flow of money outside the country.
The regulator also feels that the move will enable MFs to have greater opportunities for investment overseas. The existing facility allowing a limited number of qualified Indian Mutual Funds to invest cumulatively up to $1 billion in overseas Exchange Traded Funds shall remain unchanged, RBI said.
The move will not have any major implications immediately, as Indian mutual funds have invested only around $1.5 billion in overseas markets so far.
According to information on the Valuereaserach website, eight MF schemes manage around Rs 6,000 crore ($ 1.5 billion) as assets in schemes that are mandated to invest overseas.
The largest among these is DSP World Gold Fund that has assets under management of over Rs 1,760 crore. Other large fund schemes are managed by Birla Sun Life, ICICI-Prudential and Tata AMC.
Fund managers say that with the ceiling on overseas investments increased, investors will now be able to place their eggs in different baskets, thus being able to diversify their portfolio.
This will also lead towards fuller capital account convertibility, they add. On an average, funds that invest overseas are delivering better returns that return exclusively in India, over the past year.
The regulator also feels that the move will enable MFs to have greater opportunities for investment overseas. The existing facility allowing a limited number of qualified Indian Mutual Funds to invest cumulatively up to $1 billion in overseas Exchange Traded Funds shall remain unchanged, RBI said.
The move will not have any major implications immediately, as Indian mutual funds have invested only around $1.5 billion in overseas markets so far.
According to information on the Valuereaserach website, eight MF schemes manage around Rs 6,000 crore ($ 1.5 billion) as assets in schemes that are mandated to invest overseas.
The largest among these is DSP World Gold Fund that has assets under management of over Rs 1,760 crore. Other large fund schemes are managed by Birla Sun Life, ICICI-Prudential and Tata AMC.
Fund managers say that with the ceiling on overseas investments increased, investors will now be able to place their eggs in different baskets, thus being able to diversify their portfolio.
This will also lead towards fuller capital account convertibility, they add. On an average, funds that invest overseas are delivering better returns that return exclusively in India, over the past year.
The Bombay Stock Exchange has said its benchmark index Sensex-based futures will start trading on the US Futures Exchange from on Friday.
The launch of the Sensex-based futures would enable overseas investors to get an exposure to the domestic market, a BSE statement said.
Trading on these futures on the USFE, Chicago would be available for 23 hours a day to capture different time zones. The dollar-denominated cash settled contract would give arbitrage opportunities to the investors.
“It is indeed a proud moment for us, given the fact that we have been able to put the Indian markets on the global map by providing a platform for investors across geographies to invest in the promising India growth story.
“We are confident of the fact that this exclusive arrangement with USFE will be a success and will be a milestone in the history of the Indian capital market,” said BSE managing director and CEO Rajnikant Patel.
The contract would have a notional value of $40,000 and a tick value of $10. The clearing and settlement would take place through The Clearing Corporation, Chicago.
The launch of the Sensex-based futures would enable overseas investors to get an exposure to the domestic market, a BSE statement said.
Trading on these futures on the USFE, Chicago would be available for 23 hours a day to capture different time zones. The dollar-denominated cash settled contract would give arbitrage opportunities to the investors.
“It is indeed a proud moment for us, given the fact that we have been able to put the Indian markets on the global map by providing a platform for investors across geographies to invest in the promising India growth story.
“We are confident of the fact that this exclusive arrangement with USFE will be a success and will be a milestone in the history of the Indian capital market,” said BSE managing director and CEO Rajnikant Patel.
The contract would have a notional value of $40,000 and a tick value of $10. The clearing and settlement would take place through The Clearing Corporation, Chicago.
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