New trading hours for NSE and BSE

From 4 January 2010, trading will start at 9:00 IST and close at 15:30 IST compared to the current timing of 9:55 IST to 15:30 IST.

So wake up early!

OMCs valuations seem full

The government had not issued any oil bonds and that has raised serious concerns regarding the delay in the issue of oil bonds. However, the
finance secretary's statement on compensating the OMCs in cash instead of oil bonds if implemented will be a positive and is expected to allay the concerns related to the intention of the government with regard the OMC compensation.

The positive indications from the government on the subsidy front, the hike in automobile fuel prices and the oil moving in a narrow band for sometime have led to a steep run-up in the stock prices of the OMCs. Since April 01, 2009, IOCL, BPCL and HPCL are up.

Hence, at the current market price, it is believed that the valuation of the OMCs seems full. We highlight here that any development or any notification from the government related to the de-regulation of the automobile
fuels could result in the re-rating of the OMCs. 

Beware of real-estate stocks!

In key economic data, new home sales tumbled 11.3% in November 2009, raising the specter that previous positive signs in the industry were the result ofgovernment stimulus and not sustainable!

Beware of real-estate stocks!

CRR to be raised if prices do not decline in December.

Montek Singh Ahluwalia said - from January 2010 you will see a decline a food prices. What you see now is speculative, probably due to the drought situation. The stock situation is relatively OK. Problems such as this cannot be tackled by blunt instruments like monetary policy."

Price increase at the retail level is much more than the increase at the wholesale level. This is because of dysfunctionality in the distribution system. The ministry is looking into it, but whenever required, the country should do imports.

India's food-price inflation cannot be tackled through monetary and other policy steps, while inflationary expectations will not stay long. Earlier India's central bank may have to raise the cash reserve ratio (CRR)
to drain money from the banking system if prices do not decline in December.

Buy Lupin with a target of 1700

LUPIN in the pharmaceutical sector looks areally good. It is fundamentally a very strong company as per my research. Lupin is also getting into the Japanese market. Japanese markets have never been easy to tap into and this might be a good opening for Lupin.
Analyts feel that this stock will touch 1700 in year 2010.

Disclosure: I hold this stock in my portfolio.

Advance tax payments by Indian firms

Advance tax payments by Indian firms rose 24 % annually in October-December, signaling higher corporate profits and raising prospects that the country may exceed the target for direct taxes. The corporates paid
about Rs 55,900 crore in advance tax in the December quarter compared to about Rs 50500 crore during July-September quarter, and  about Rs 41,600 crore during the year-ago quarter.

Sectors to watch out for....

Three sectors to watch out for are
(1) Automobiles
(2) Pharma
(3) IT

Investment in these sectors can be a safe and defensive pick for next few months if the markets correct sharply from here.

RBI may tighten monetary policy in this month

The RBI may tighten monetary policy in this month as inflation could rise to near 7% in March 2010. By the end of December, they can review the situation and take action... depending how the prices have behaved in December. By the end of March 2010, inflation could be close to 7%.

Lok Sabha approves spending of funds

The Lok Sabha on Friday approved extra spending of $5.5 billion for the year ending March 2010. The 

additional spending is needed for food and fertiliser subsidies, wages, infrastructure
projects and an equity infusion into state-run carrier Air India. 
Finance Minister Pranab Mukherjee has said the additional spending need not be funded through 

additional borrowing. 

Fund inflow into emerging markets

The latest data from global fund tracker showed emerging market equity funds received $2.3 billion in inflows in
the week ended 9 December 2009, bringing 2009 inflows to $75.4 billion.
Emerging-market funds are heading for record annual inflows in 2009. The previous record was $54 billion in 2007.

IIP for October

The Index of Industrial Production (IIP) for October 2009 registered a growth of 10.3% Y-O-Y,
well below the consensus estimate of 12%.
For the year-to-dateperiod of FY2010, the IIP growth now stands at 7.1%, which is higher compared with the 4.3% growth during the corresponding period of the last year.

The growth in the industrial output during October 2009 was led by the manufacturing and mining segments while the growth in the electricity segment was more or less in line with that of the previous year.

RBI Governer on food price inflation

On Monday central bank Governor D. Subbarao said food price inflation was a supply-side issue and monetary
policy was an inefficient tool to rein it in.The RBI holds its next policy meeting in late January, but it can adjust monetary policy at any time.

Capital inflows into India reflect investor confidence in the Indian economy

Capital inflows into India reflect investor confidence in the economy, the RBI governor Duvvuri Subbarao
said at a televised panel discussion, although measures to control them could not be ruled out in case there was a surge in
foreign funds that needed to be contained. 

Rallis India can touch 987

Rallis can touch 987 on the charts.
A change of trend is seen in the MACD charts. 

Exide Industries can touch 124.

Exide Industries is on an up-move. Its immidiate target is seen at 124. The MACD(12-26) is just srossing above the MACD signalline.

BEML on the upmove, target 1092.

Stocks like BEML are on an upmove. On the MACD charts a strong upmove is seen which can take the stock to 1092.

FDI for Pension funds.....

In a move that is aimed at signalling the UPA government's intent to aggressively push the reform agenda, the Cabinet on 3 December 2009 clear the Pension Fund Regulatory & Development Authority Bill that seeks to bring foreign direct investment (FDI) into the sector. The Bill proposes to allow foreign players to hold up to 26% stake in Indian pension fund companies. It would also permit pension funds to deploy part of
their corpus abroad in approved instruments.

World Bank on India

The World Bank has committed to increase its lending to India to about $7 billion this year from an average $2.3 billion in the previous four years.

In September, the World Bank approved $4.3 billion in loans for India to help finance infrastructure building and to shore up the capital of some state-run banks as the economy recovers from the global financial crisis. The loans are part of the bank's $14 billion lending for Asia's third-largest economy over three years through 2012.

Govt to sell stake in profit making firms

On Tuesday, Finance Minister Pranab Mukherjee told parliament the government would sell up to 10% of its stake in the profit making state-run firms.

The government has reportedly drawn up 25 state firms for stake sales. These include-
Nuclear Power Corporation of India, 
National  Bank for Agriculture and Rural Development, 
Exim Bank of India,
Punjab & Sind Bank, 
Indian Railways Finance Corporation and
National Housing Bank. 

Other companies planning initial public offers (IPO) include SBI Caps and SBI Fund Management, both
subsidiaries of government-controlled State Bank of India.

Many of these IPOs could hit the market after the follow-on public offers of 5% each in NTPC and Rural Electrification Corporation, and a 10% stake sale in unlisted Satluj Jal Vidyut Nigam are completed in the current financial year.

Economy can grow at 7% in 2009-2010

C. Rangarajan, chairman of the prime minister's Economic Advisory Council on Tuesday said the robust growth of the economy in July-September indicated it could expand at around 7% in 2009-10.

The latest numbers indicate that industry and services are growing very strongly, this could help offset to a very large extent the impact of the decline in agricultural production.

Automobile growth intact

Automobile sales continued its robust growth momentum in November 2009 on account of strong demand environment, which is also driving the success of newly-launched products by automakers.
Traditionally, the sales volume in auto sector slows down after the festive season, however in the current year, the volume has remained intact for major automakers such as Hero Honda Motors and Maruti Suzuki India, which speaks about buoyancy  in demand.

Passenger car leader Maruti Suzuki reported a boisterous 66.6% y-o-y growth in its total sales volume for November 2009. In the two-wheeler segment, market leader Hero Honda’s sales volume for the month grew by strong 31.8% yoy.

GDP at 7.9% in Q2

Monday showed the gross domestic product (GDP) grew by 7.9% in Q2 September 2009, from 7.1% in the
previous year, as stimulus measures boosted demand and manufacturing activity surged. The economy had
registered a 6.1% growth in the first quarter.

The bulk of the recovery was led by a 9.2% growth in manufacturing, 9.5%  in mining and 6.5% in construction. But agriculture continued to me a major drag with a mere 0.9% growth.