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“Life is a festival only to the wise.” Ralph Waldo Emerson.

Happy Janmashtami. The bull camp appears to have regained its winning ways just as the festive spirits are beginning to escalate here in India. The start promises to be good given the cheerful mood across the globe following encouraging reports on manufacturing output – first in China and then in the US. While people in India form human pyramids to reach a high-hanging pot of butter and break it, the bulls too will team up to help the Nifty break past 5500.

The crucial thing to watch out for is whether the Nifty can sustain above 5500. Just recently it crossed 5500 but failed to extend its ascent. Bulls are of course hoping this time things might be different. But, the precarious and uncertain global situation could continue to play spoilsport every now and then. All eyes are on Friday’s US monthly payroll data, which could swing the sentiment either ways, at least in the immediately short term. The fact that global data points are not consistent will make world markets that much more volatile.

Back home, the Government has revised GDP data (based on expenditures) at market prices to show even better growth. However, if the latest batch of reports are any indication, we could see some softening in India as well. The overall GDP number for FY11 will be fairly robust. The big challenge will be how to tackle an apparent slowdown in key regions like the US, China and euro-zone. Inflation of course continues to be a big issue, and the RBI is likely to continue hiking rates to try and contain it.

FIIs were net buyers of Rs3.59bn in the cash segment on Wednesday (provisionally), according to the NSE web site. Local funds were net buyers of Rs1.68bn. In the F&O segment, the foreign funds were net buyers at Rs6.82bn. FIIs were net buyers of Rs5.38bn in the cash segment on Tuesday. Mutual Funds were net sellers at Rs3.52bn on the same day.

Telecom shares might continue to hog limelight as they have received 3G spectrum from the Government. Auto stocks may also remain in the spotlight after reporting strong monthly sales. Companies with exposure to insurance could see some action as the new ULIP regime kicked off from Wednesday.

Reliance has increased its stake in EIH from 14.2% to 14.8%. Promoters of Bajaj Auto have hiked their stake in the company. TCS’ UK arm has bought Unisys Insurance Services, in lieu of which the company has received business worth £250mn for six years. Reliance Broadcast Network plans to raise Rs4bn through a preferential issue.

Compucom Software’s board will consider issue of preferential shares to promoters and others besides a QIP on Sept. 9. Unity Infraprojects has bagged a couple of projects from Maharashtra. Aegis Logistics’ Board has approved a stock split and plans to raise Rs1bn by way of preferential allotment or a QIP. NALCO is considering selling stake in its $3.9 billion aluminium project in Indonesia in lieu of acquiring equity in coal mines in the island country. JSW Energy has commissioned commercial operation of the first unit of 300 MW of the 1,200-MW (4×300 MW) thermal power project at Jaigad, Ratnagiri district of Maharashtra.

US stocks started September with a bang after a dismal August, as investors welcomed a surprising increase in manufacturing output at home and in China. In the process, Wall Street ignored slightly bearish reading on private payrolls, construction spending and weak auto sales.

The Dow Jones Industrial Average rose 254.75 points, or 2.5%, to 10,269.47, with all 30 of its components tallying gains.

The S&P 500 Index gained 30.96 points, or 3%, to 1,080.29, with the industrial and consumer-discretionary sectors pacing the rise among its 10 industry groups.

The Nasdaq Composite Index climbed 62.81 points, or 3%, to end at 2,176.84.

For every stock on the decline, six rose on the New York Stock Exchange, where 1.2 billion shares traded.

The major US indices had ended Tuesday’s session unchanged, closing out a lackluster August.

The dollar fell against the euro and the British pound, but rose versus the Japanese yen.

Currency trading volume around the world has hit $4 trillion a day, a 20% jump compared to 2007, said the Bank of International Settlement.

Oil futures for October delivery rose $2.08 to $74.03 a barrel.

Gold for December delivery fell $2.20 to $1,248.10 an ounce.

The yield on the 10-year Treasury note rose to 2.58% from 2.48% late on Tuesday.

The Institute for Supply Management reported that its index of factory activity rose to 56.3 last month from 55.5 the prior month. Economists were expecting the index to edge lower. Readings above 50 signal growth.

The manufacturing data boosted industrial names and companies in the materials sector.

Meanwhile, payroll processing firm ADP reported that employers cut 10,000 jobs in August. Economists were expecting private sector employers to add 13,000 jobs during the month, after adding 37,000 in July.

A separate report showed that planned job cuts plummeted to a 10-year low in August, as employers shed 34,768, down 17% from the previous month, according to outplacement firm Challenger, Gray & Christmas.

The reports come two days before the government’s monthly report on jobs and unemployment on Friday. Economists expect the government to report that the economy lost 120,000 jobs in August, after employers cut payrolls by 131,000 in July. The unemployment rate is expected to edge up to 9.6% from 9.5%.

Other reports on Wednesday included construction spending, which fell 1% in July, versus a forecasted 0.7% decline.

While the improvement in manufacturing allayed some concerns about the US economy, Wall Street remains vulnerable given the uncertain outlook for growth.

The focus could shift to jobs on Thursday morning when the government’s weekly report on initial claims for jobless benefits comes out. Investors will also absorb the latest readings on factory orders and pending home sales shortly after the market opens.

General Motors, Ford Motor and Toyota all reported disappointing sales, kicking off what is expected to be the worst August for industry-wide auto sales in 27 years. The drop in auto sales is partly a result of tough comparisons to the Cash for Clunkers program of last summer.

Shares of Burger King Holdings jumped 14%, following a report that the fast food chain is considering a possible sale to buyout firms. The Wall Street Journal reported that that private equity firms that have expressed interest in buying Burger King include Britain’s 3G Capital Group.

Apple’s stock was up 2.8% as the company held its annual music-themed special event. CEO Steve Jobs unveiled its newest range of iPods and advances in the iTunes music store.

Shares of BP climbed 3.7% as the oil giant said it has agreed to sell its interests in ethylene and polyethylene production in Malaysia to government-owned Petronas for $363 million in cash.

European stocks rallied on the back of positive data on manufacturing output in the US and China, assuaging some concerns on the ongoing economic recovery in the global economy.

The Stoxx Europe 600 index advanced 2.7% to end at 258.19 points.

The Institute for Supply Management (ISM) in the US reported that its manufacturing index rose to 56.3% in August from 55.5% in July. The data was better than expected, since economists had projected a decline.

China’s manufacturing activity expanded in August, according to two separate surveys released on Wednesday. Also, Australia’s economy grew more than expected in the second quarter.

The French CAC 40 index was the top gainer, surging 3.8% to 3,623.84. The UK’s FTSE 100 index rose 2.7% to 5,366.41. The benchmark indexes in Italy, Spain and Denmark all gained more than 3%. Sweden’s OMX Stockholm 30 index soared 3.7%.

Shares of French media and communications giant Vivendi surged after the group said its full-year earnings outlook has improved and its adjusted second-quarter earnings beat forecasts.

Cement producers in Europe got a boost after Cheuvreux upgraded the sector, lifting both Holcim and Lafarge to outperform from underperform. Shares of Holcim gained 3.2% in Zurich and those of Lafarge rallied 5.5% in Paris.

In Germany, shares of Heidelberg Cement jumped 5.9%, as Cheuvreux reiterated its outperform rating on the stock.

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website

The market is likely to extend Wednesday (1 September 2010)’s 1.31% gains on upbeat global cues following encouraging economic data in the US. Asian markets were trading firm. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could gain 35 points at the opening bell.

On macro front, the government will unveil data on some wholesale price indices for the year through 21 August 2010 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST today.

Cement stocks may see action following release of monthly sales figures. UltraTech Cement’s sales rose 2.4% to 2.96 metric tonne (mt) in August 2010 over August 2009. The cement sales figures include that of the demerged Grasim cement business.

ACC’s cement sales slipped to 1.57 mt in August 2010 from 1.65 mt in August 2009. Jaiprakash Associates cement sales rose 51% at 1.08 mt in August 2010 over August 2009. Ambuja Cement’s cement sales were flat at 1.42 mt in August 2010 over August 2009.

Bike major Hero Honda Motors reported 2.16% rise in total vehicle sales to 4.24 lakh units in August 2010 over 4.15 lakh units in August 2009.

Asian stock markets advanced on Thursday, after Wall Street soared on encouraging manufacturing data. The key benchmark indices in Hong Kong, China, South Korea, Indonesia, Taiwan, Singapore and Japan were up by between 0.38% to 1.3%.

US markets logged steep gains on Wednesday, 1 September 2010 as investor mood brightened after better-than-expected factory data from the United States and China. The Institute for Supply Management showed U.S. factory activity grew faster than forecast. The ISM report added fuel to a global equities rally on Wednesday driven by strong overnight data out of China and Australia. The Dow Jones Industrial Average rose 254.75 points or 2.54% to 10,269.47, its biggest one-day gain since 7 July 2010 and its fifth-largest one-day gain this year. The Standard & Poor’s 500 Index added 30.96 points, or 2.95% to 1,080.29. The Nasdaq Composite Index gained 62.81 points, or 2.97% to 2,176.84.

Ahead of the key payrolls data on Friday, investors shrugged off a report from ADP Employer Services showing private U.S. companies unexpectedly cut 10,000 jobs in August as well as government data indicating U.S. construction spending fell to its lowest rate in 10 years.

World trade continued to rebound strongly in the first half of this year, rising by over a quarter from year-ago levels, with emerging economies showing particularly powerful export growth, World Trade Organization figures showed on Wednesday. Global exports of merchandise goods, measured by value in current dollars not adjusted for price changes, were 25.8% higher in the second quarter than a year earlier, after a 25.7% rise in the first quarter, WTO statistics showed.

Back home, exports rose for the ninth straight month in July 2010, growing an annual 13.2% to $16.24 billion, the government released last week data showed. Imports for the month rose 34.3% to $29.17 billion, widening the country’s trade deficit to $12.93 billion. Exports during the April-July period rose 30.1% to $68.63 billion.

The trade deficit edged back into double digits in April 2010 after averaging $9.1 billion in Q4 March 2010 and has remained elevated since then. Latest data shows the gap stood at $12.93 billion in July 2010, highest since September 2008 and widening further from $10.55 billion in June 2010.

The HSBC Markit Purchasing Managers’ Index, based on surveys of 500 Indian companies, fell to 57.25 in August 2010 from 57.6 in July 2010, but strength in new orders helped the index remain well above the 50 mark that divides growth from contraction. The manufacturing PMI had edged up to 57.6 in July 2010 from 57.3 in June 2010, when it slipped from a multi-year high.

The new orders index was 61.99 in August 2010, down from 62.82 in July 2010. The survey showed that output prices rose at their slowest rate in 10 months in August 2010, while the input price index rose for the second consecutive month.

The gross domestic product (GDP) grew 8.8% in Q1 June 2010, data released by the government on Tuesday, 31 August 2010, showed. The manufacturing sector grew 12.4%, mining sector expanded 8.9%, construction sector grew 7.5%, and farm sector expanded at 2.8%. Output in the combined sectors — trade, hotels, transport and communication, jumped 12.2%.

The economy could grow better than 8.5% in the fiscal year that ends in March 2011, Planning Commission deputy chairman Montek Singh Ahluwalia said on Tuesday, 31 August 2010. Government spending is expected to pick up after the June-September monsoon rains, Ahluwalia said.

The key indices rallied on Wednesday, 1 September 2010 on strong global cues. Strong auto sales, data showing expansion in manufacturing sector in August 2010 and data showing resumption of buying by foreign funds, underpinned sentiments. The BSE 30-share Sensex rose 234.75 points or 1.31% to 18,205.87 on Wednesday.

As per provisional figures on NSE, foreign funds bought shares worth Rs 359.81 crore and domestic funds bought shares worth Rs 168.56 crore on Wednesday.

This post is shared on the moneyvida blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website

Stocks may edge higher at the onset of the trading session, extending Tuesday’s (31 August 2010)’s strong intraday rebound. Data showing resumption of buying by foreign funds and firm Asian markets, will support share prices. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 35.50 points at the opening bell.

Auto and cement stocks will be in focus as companies start unveiling sales data for the month just gone by. HSBC will release manufacturing Purchasing Manager’s Index (PMI) for August 2010 today, 1 September 2010. The manufacturing PMI had edged up to 57.6 in July 2010 from 57.3 in June 2010, when it slipped from a multi-year high.

HSBC may also unveil the services sector PMI for August 2010 this week. The index, which shows business activity in the services sector, had eased to 61.7 in July 2010 from 64 in June 2010.

Foreign funds bought shares worth a net Rs 287.88 crore on Tuesday, 31 August 2010, as per the provisional data released by the stock exchanges. Domestic funds dumped shares worth a net Rs 595.33 crore on that day.

The economy grew at a robust pace in the first quarter, the latest data showed. The gross domestic product (GDP) grew 8.8% in Q1 June 2010. The manufacturing sector grew 12.4%, mining sector expanded 8.9%, construction sector grew 7.5%, and farm sector expanded at 2.8%. Output in the combined sectors — trade, hotels, transport and communication, jumped 12.2%.

The economy could grow better than 8.5% in the fiscal year that ends in March 2011, Planning Commission deputy chairman Montek Singh Ahluwalia said on Tuesday, 31 August 2010. Government spending is expected to pick up after the June-September monsoon rains, Ahluwalia said.

Asian stocks edged higher on Wednesday, 1 September 2010, on positive economic data in US and China. The key benchmark indices in Hong Kong, China, South Korea, Indonesia, Taiwan, Singapore and Japan were up by between 0.26% to 1.3%.

China’s official purchasing managers’ index rose to 51.7 in August from 51.2 in July, according to figures released Wednesday by the China Federation of Logistics and Purchasing. The reading was a tad lower than market expectations. A reading over 50 indicates an increase in manufacturing activity.

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com  to see DP’s personal blog/website.

Tuesday’s late recovery could well spill into today’s session, at least in early trades. Global markets didn’t witness any further damage overnight. Asian markets are mildly positive. Extrapolating the global trend, we expect a steady to higher start for Indian bourses. The advance may sustain, provided there is no fresh bad news or imaginary evils from any corner of the world.

It’s the first trading session of a new month, which means lots of new data points to absorb and analyse. Back home, we will get monthly Auto and Cement sales aside from the trade data. Globally, the markets will closely follow the manufacturing PMI figures, particularly that for China and the US. But the most awaited data is the US monthly payroll report that will be out on Friday.

Talking of data, reports suggest some discrepancies in Q1 GDP numbers. May be the Government’s statistical office could have a credible explanation. Nevertheless, India is likely to grow at upwards of 8% in FY11. The big question is whether a slowing global economy will bite off a few percentage points from the GDP.

The US is clearly slowing down and that has got the Federal Reserve worried. Last month it decided not to shrink its balance sheet by pledging to buy more debt in order to ward off the threat of a double-dip as also a possible deflation. One will have to see how the US economy behaves in the coming months.

On the other hand, there does appear to be some stability in the euro-zone though it is also not completely out of the woods. The Chinese economy is also moderating though growth there still remains fairly robust. Japan continues to be an enigma as well as a matter of concern. The BOJ has just announced further monetary easing and more is expected as a stronger yen hurts its export-centric economy.

Coming back to India, the NSE Nifty is likely to meet resistance at 5430-5450 and further along the road to 5500. The top end of the current trading range stands at 5600 but it will take continuously positive global markets and strong FII flows before we hit that milestone. Nifty support is likely to kick in at 5370-5350. But, a crack below these levels could take the index as low as 5200.

Kingfisher Airlines could be in the spotlight again as its Board has approved fund raising of up to Rs50bn. Hero Honda could remain in the limelight amid speculation that Honda is planning to exit the Indian joint venture though both the companies yesterday denied the news.

Sun Pharma is another stock to keep an eye on. The USFDA has issued a warning letter to the company for manufacturing practice violations at its Cranbury facility in New Jersey.

At the same time, the USFDA has granted its subsidiary an approval for its Abbreviated New Drug Application (ANDA) to market a generic version of Strattera, atomoxetine hydrochloride capsules. Annual sale in US for these strengths of branded and generic atomoxetine hydrochloride capsules is estimated at over US$530 million.

Telecom companies may also see some action as the Government is expected to issue 3G spectrum to the winners of the auction earlier this year. But the consumers will have to wait to enjoy high-speed internet on 3G compatible mobiles as these services are likely to see the light of day only by the end of the year.

FIIs were net buyers of Rs2.88bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs5.95bn. In the F&O segment, the foreign funds were net buyers at Rs13.48bn. FIIs were net buyers of Rs2.73bn in the cash segment on Monday. Mutual Funds were net buyers at Rs83mn on the same day.

US stocks ended nearly unchanged on Tuesday after a listless session, as the minutes of the last FOMC meeting overshadowed a couple of encouraging economic reports.

All eyes are now on Friday’s monthly jobs data, which will throw some more light on the state of the world’s largest economy.

The Dow Jones Industrial Average rose 4.99 points to end at 10,014.72. The S&P 500 index finished flat at 1,049.33. The Nasdaq Composite index fell 5.94 points to 2,114.03.

Trading volumes continued to be light with many market participants on vacation. Only 1.4 billion shares changing hands at the New York Stock Exchange. Advancing issues still topped decliners by 16 to 13.

US stocks had dropped more than 1% in thin trading on Monday.

The dollar edged lower against the euro and the Japanese yen but was higher versus the British pound.

Oil futures for October delivery fell $3 to $71.70 a barrel.

Gold for December delivery gained $11.10 to $1,250.30 an ounce.

The yield on the 10-year Treasury note fell to 2.48% from 2.54% late on Monday.

Wall Street suffered its worst August performance since 2001, as concerns about the economy continued to cast a shadow on the markets. All three indexes posted monthly declines. The Dow lost about 4.3% in August, while the S&P 500 fell 4.7%, and the Nasdaq slumped 6.2% in the month.

Small-capitalization stocks, seen as leading indicator of the economy, took an even bigger hit last month. The Russell 2000 index of small-cap stocks posted its worst August performance in 12 years.

The lackluster performance in August came after stocks rallied 7% in July on strong profit growth from major US corporations. But the market is still down for the year. The Dow has lost nearly 4% so far in 2010.

US stocks were supported earlier by a larger-than-expected rise in consumer confidence and a jump in US home prices. But minutes from the last meeting of the Federal Reserve did little to dispel growing concerns on the tepid economic recovery in the US ahead of the release of the jobs data for August this week.

Minutes of the Aug. 10 Fed meeting showed that most FOMC members agreed that the new strategy of reinvesting maturing or refinanced mortgage-related securities was necessary given the weakening economic recovery.

Also, the minutes raised concerns that the central bank may not take steps to support the faltering economic recovery unless conditions deteriorate significantly.

Investors have been focused on the outlook for the US economy recently as the nation’s growth has slowed. In particular, they are worried that the weak job market will continue to weigh on consumer spending - which drives the bulk of economic activity.

Friday’s big employment report is expected to show that the US economy lost jobs for a third month in a row in August. Economists expect employers to have shed 120,000 jobs in August, after cutting payrolls by 131,000 in July. The unemployment rate is forecast to inch up to 9.6% from 9.5%.

Economic reports due on Wednesday morning include an index of nationwide manufacturing activity and a report on private sector job cuts in August. In addition, major automakers report August sales figures throughout the day.

The uncertainty surrounding the economic outlook and historically low trading volumes led to increased turbulence on Wall Street during August. The CBOE Market Volatility Index, or VIX, rose more than 18% in August to 26.05.

The Conference Board’s index of consumer confidence rose to a reading of 53.5 in August from an adjusted 51 in July. Economists were expecting the index to come in at 50, according to consensus estimates.

The rebound in confidence numbers was attributed mostly to an improvement in how consumers view the short-term economic outlook, the Conference Board said. Meanwhile, the weak job market continues to darken their long-term view.

Separately, the Chicago PMI, a regional reading on manufacturing activity, fell to 56.7 in August. That’s down from 62.3 in July and slightly weaker than expected. Economists were looking for 57 in August.

Before the market opened, a report showed that national home prices jumped a substantial 3.6% in the past year, versus a forecasted 3.1% gain. The S&P/Case-Shiller Home Price Index also showed that prices climbed 4.4% in the second quarter, compared with a 2.8% plunge in the first quarter.

Technology stocks took a hit after technology researcher Gartner cut its 2010 projection for world-wide PC shipments, saying that the second half won’t be a strong as it previously expected.

Luxury-fashion retailer Saks jumped nearly 20%. Saks’ climb was fueled by speculation that a private-equity consortium is preparing a cash bid of $1.7 billion, or $11 a share, for the retailer, according to a newspaper. A Saks spokeswoman refused to comment on the report.

Biotech agribusiness company Monsanto dropped 5.8% after predicting its fiscal-year earnings will come in at the low end of its prior view.

European stocks erased intra-day losses to finish higher after consumer confidence in the US increased and home prices rose better than estimated, assuaging some concerns over the health of the world’s largest economy.

The Stoxx Europe 600 index finished up 0.1% at 251.31 points, rebounding from an intraday low of 247.82. The index has dropped 1.6% this month.

The UK’s benchmark FTSE 100 index closed up 0.5% to 5,225.22. The French CAC 40 index gained 0.1% to 3,490.79 and Germany’s DAX 30 climbed 0.2% to 5,925.22.

European stocks had traded lower for most of the session after Tokyo’s Nikkei Stock Average dropped 3.6% on continued worries about the strength of the yen.

Shares of French retailer Carrefour had a see-saw session, losing 0.8%, having earlier gained as much as 2% after the retailer said that it swung to a profit in the first half of the year.

Hermes International dropped 2.7% after reporting its first-half results

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website

European markets closed in positive territory by less than a percent on Tuesday. This was followed by US indices which restarted it losing spree after a breather of small rally on Friday but managed to close flat. Asian markets have all opened in green by about a percent.SGX Nifty is also trading in a positive range with a gain of 35 points signaling a positive opening for Indian markets.

Indian markets traded with a negative bias for most of the day but rebounded from 5350 to close above 5400.The Sensex closed at 17971.12 & S&P CNX NIFTY at 5402.40.

Our market are in a confirmed long term and medium term uptrend.

Global markets are trading in a range thus indicating a range bound or directionless market.Our market have taken a support from 5350 to move back beyond 5400 indicating support for market at 5350-5380 levels.

VIX showed weakness at the final sessions on Tuesday indicating return of strength and decrease in volatility in our market.

Stocks view:

Shorting opportunity:

SBI( long term), Aban offshore

Buying Opportunity:

BPCL (long term),Tata Motors, ICICI Bank, Tata Steel

( This article is also published on www.equitytrendsindia.com )

The market may edge lower, tracking weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could fall 36 points at the opening bell. On the macro front, the government will today, 31 August 2010, unveil Q1 June 2010 GDP data. The economy expanded an annual 8.6% in Q4 March 2010.

The government has delayed the implantation of the direct taxes code by one year to 1 April 2012. Earlier, the government had planned to implement the code from 1 April 2011.

Under the Direct Taxes Code Bill, 2010 tabled in the Lok Sabha by Finance Minister Pranab Mukherjee and referred to the Select Committee of Parliament for scrutiny, the government has sought to raise the income tax exemption limit from Rs 1.6 lakh to Rs 2 lakh while retaining a host of incentives for individuals. While senior citizens (above 65 years) will enjoy a higher exemption of Rs 2.5 lakh, women taxpayers will have no additional relief as they have not been categorised separately.

As for corporate taxes, the levy will be at a flat rate of 30% with no surcharges or cesses. The minimum alternate tax (MAT) will be levied on book profits at 20%.

The good news for investors in the stock market is that the DTC bill has maintained the benefit of zero tax on long-term capital gains on sale of shares held for a period exceeding one year. Short-term capital will now be charged at 50% of the base rate, i.e., 5%, 10% or 15%, depending on the applicable slab rate for individuals and 15% for corporates. Short-term gains are currently taxed at 15% for all investors.

It has also been clarified that profit on sale of shares by foreign institutional investors (FIIs) will be charged under the head capital gains. Hitherto, the law was vague as to whether such gains are capital gains or business income. Also for FIIs, regardless of any tax-friendly treaty, long-term capital gains on listed equity will be exempt but treaty benefit of short-term capital gains currently available in relation of certain tax-friendly jurisdictions, while not having been withdrawn, may attract anti-avoidance provisions.

The applicability of the existing profit-linked tax incentive scheme has been extended to units being set up in special economic zone (SEZ) till 31 March 2014, provided the SEZs are notified before 1 April 2012. However, with respect to SEZ developers, the profit-linked incentive scheme would continue only if the SEZ is notified on or before 31 March 2012. All other new SEZ developers and units would be entitled to investment-based incentive scheme.

Asian stock markets were lower Tuesday, 31 August 2010, after Wall Street’s drop on Monday, 30 August 2010, with the Japanese market falling sharply as investors continued to fret about the yen’s strength. Soft US data on Monday, including weak readings on personal income and Texas-area manufacturing activity, also kept many investors on the defensive. The key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore, Taiwan, and Indonesia, were down by between 0.03% to 2.59%.

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website.

European markets closed in negative territory by less than a percent on Monday. This was followed by US indices which restarted it losing spree after a breather of small rally on Friday and closed negatively by about a percent. Asian markets have all opened in red by more than a percent.SGX Nifty is also trading in a negative range with a loss of 36 points signaling a weak opening for Indian markets.

Indian markets opened with a gap up opening on Monday but traded with a negative bias for most of the day.The Sensex closed at 18032.11 & CNX NIFTY at 5415.45.

Our market are in a confirmed long term and medium term uptrend.

Global markets are trading in a range thus indicating a range bound or directionless market.Our market are now back to levels near earlier bottom of previous range i.e. 5380 and if it doesn’t sustain then we may assume that move beyond 5480 was just ‘range expansion’ and possibility of another 100 points cut increases.

VIX has started it upward move after touching a year long low indicating weakness and high volatility in market.

Stocks view:

Shorting opportunity:

LIC Housing Fin, SBI( long term), Aban offshore

Buying Opportunity:

BPCL (long term),Tata Motors, ICICI Bank

( This article is also published on www.equitytrendsindia.com )

Headlines for the day:

Sesa Goa plans Rs9,000 crore steel foray

Government may cut size of SBI’s rights issue

Foreign trade policy review responds to exporters’ demand

Events for the day:

Major corporate action

Ranklin Solutions board to consider stock split today
Ex-date for stock split of Indian Hume Pipe Co
Ex-date for dividend of Hero Honda Motors, National Fertilizers
For more events and news, log on to Sharekhan.com

Updates on global events

The US gross domestic product (GDP) for the second quarter rose by 1.6%.

The UK GDP for the second quarter rose by 1.2%.

Pre-market report

Global signals

The European stocks rose on Friday (August 27, 2010), led by telecoms and other defensive sectors, but it was not enough to stop an overall loss for the week as investors reacted to data that cast further doubt on the strength of the economic recovery.

The US stocks rebounded to post their best gains in nearly four weeks on Friday, overcoming initial skittishness brought on by a revenue warning from Intel and dour comments from Federal Reserve Chairman Ben Bernanke.

The Asian markets were trading higher, following the Friday’s Wall Street gains and Japanese Nikkei rose more than 3% in early trades. SGX Nifty was trading 56 points higher, suggesting to have a strong start on the Dalal Street.

Indian Indices

After ending the previous week on a negative note, the Indian indices are set to open firm in today’s trade, tracking the strong path led by the global indices, as US markets closed with 1.65% gain and Asian markets trading higher. The investor sentiment seemed to be positive and markets may trade on a healthy note for the rest of the day.

Investors in India will be closely watching the economy’s GDP reading for the April-June quarter on Tuesday (August 31, 2010) that may have a bearing on the Reserve Bank of India (RBI)’s monetary policy decision in September.

Commodity cues

The crude oil prices ended higher on Friday as equities on Wall Street rallied on reassurances from US Federal Reserve Chairman Ben Bernanke, as the crude oil futures for October delivery rose by $1.81, to settle at $75.17 a barrel.

Daily trend of FII/MF investment in equities

The foreign institutional investors (FIIs) were in a buying mode as they bought Indian equities worth a net of Rs156.60 crore on August 27, 2010, as compared to the net sellers of Rs290.40 crore on August 26, 2010. This shows that the foreign funds into Indian equities remain strong.

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website

The market may edge higher, recovering from Friday’s (27 August 2010) broad-based decline, tracking gains in Asian stocks, which rose on rally in US stocks on Friday. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could rise 57.50 points at the opening bell.

The government is likely to table the much-awaited Direct Taxes Code (DTC) bill in the Lok Sabha today, 30 August 2010, to pave the way for the introduction of a new framework and structure for direct taxes including personal income tax and corporate tax. The Cabinet had approved the DTC Bill that proposes a restructuring of income tax slabs — a move that would leave more money in the hands of people. DTC Bill, once legislated, will replace the archaic Income Tax (I-T) Act by rationalising tax slabs for both corporations and individual I-T payers.

The Bill has proposed to fix corporate income tax rate at 30 per cent inclusive of surcharges and cesses — down from the current 33 per cent. It has also proposed a Minimum Alternate Tax (MAT) of 20 per cent, instead of the present 18 per cent, on book profits of companies.

The Bill is also likely to propose to continue with exempt-exempt-exempt (EEE) method of taxation on investments up to R3 lakh. At present, all three stages of savings — income, deposit and withdrawal — are exempt from tax (EEE). The cap of R1.5 lakh per annum on deduction on payment of interest on the home loan is likely to continue.

After its introduction in Parliament, the Bill will be examined by a Standing Committee and based on its recommendations the government would consider further amendments.

In stock specific news, Sahaviriya Steel Industries Public Co. (SSI), Thailand’s largest steel producer, plans to buy Tata Steel’s Cast Products unit in the UK for about $500 million as it seeks to turn around the unprofitable business. Tata Steel’s UK unit Corus signed a memorandum of understanding with SSI and aims to complete the terms of a transaction as soon as possible, Corus said in a statement. The proposed sale includes coke ovens, power generation facilities and the Redcar Blast Furnace.

Hero Honda Motors stock turns ex dividend today for the payment of final dividend of Rs 30 per share for the year ended March 2010.

Asian stocks rose the most in four weeks on Monday as the Bank of Japan met to discuss measures to support economic growth and Federal Reserve Chairman Ben Bernanke pledged similar policies. The Nikkei 225 stock average surged 3.05% on hopes that the Bank of Japan would ease monetary policy in response to a recent sharp rise of the yen. At the extraordinary meeting, the central bank will discuss monetary control matters based on recent economic and financial developments, it said in a statement.

In other Asian stocks, the key benchmark indices, China, Hong Kong, Singapore, Indonesia, South Korea and Taiwan were up by between 0.7% to 1.59%.

US stocks rebounded to post their best gains in nearly four weeks on Friday, 27 August 2010, overcoming initial skittishness brought on by a revenue warning from Intel and dour comments from Federal Reserve Chairman Ben Bernanke. The Dow Jones Industrial Average gained 164.84 points, or 1.65% to 10,150.65. The Standard & Poor’s 500 Index jumped 17.37 points, or 1.66% to 1,064.59. The Nasdaq Composite Index climbed 34.94 points, or 1.65% to 2,153.63.

The stock market started on a positive note after US economic growth was revised down in the second quarter, but still the reading was better than expected. Strong buying interest at a key technical level and short-covering sparked the market’s comeback, and the tone improved as investors took a more positive view of Bernanke’s comments about the economy and the Fed’s readiness to act.

Bernanke told central bankers at a conference in Jackson Hole, Wyoming the recovery has weakened more than expected but the US central bank was ready to take further steps if needed to spur the recovery. The Fed chairman downplayed concerns that the economy might slip back into recession, reassuring investors spooked by his recent comments the US economy faced “unusual uncertainty.”

Back home, the infrastructure output grew 3.9% in July, marginally higher than annual growth of 3.6% in June, as crude oil and refinery output grew in double-digits, government data showed on Friday. In July, the electricity sector grew 3.8%, the same as the year-ago period, but cement contracted by 0.2% from 13.8% growth and finished steel shrank by 0.9% from 4% growth a year ago. Growth in coal slowed to 4.5% in July compared with 10.5% a year ago. Cement and finished steel output contracted because of heavy rains in mining areas and a slowdown in construction during the monsoon. The infrastructure sector accounts for 26.7% of industrial output. The industrial output rose 7.1% in June from a year earlier, its slowest pace in 13 months.

The food inflation declined further in the middle of this month even as prices of fuels remained steady, the latest data showed. Inflation in the Food Articles group stood at 10.05% for the week ended 14 August 2010, versus 10.35% in the previous week, the Commerce & Industry Ministry said. Inflation in the Primary Articles group stood at 14.75% in the week under review as against 14.85% in the week ended 7 August 2010. Inflation in the Fuel & Power group was unchanged at 12.57%. But, inflation in the Non-food Articles group rose to 22.20% from 21.70% in the preceding week.

The growth is getting more broad-based and inflationary pressures are easing and the central bank will calibrate policy action to the evolving growth-inflation dynamics, the Reserve Bank of India (RBI) governor D Subbarao said on Friday. Going forward, the Reserve Bank will calibrate policy action to the evolving growth-inflation dynamics, Subbarao said in a speech at a conference in Bangalore. Given the uncertainty in the world and the lags in monetary transmission, it is not possible to offer more precise guidance, he added.

The RBI is expected to raise key rates by 25 basis points at its 16 September 2010 policy review, after raising its lending rate by 100 basis points since March.

The good news is that the kharif sowing has been remarkably good this year. Nearly 95 million hectares, constituting over 90 per cent of the normal kharif area, has been brought under crop cover by 26 August 2010. This is nearly eight million hectares more than last year’s coverage. Almost all crops have gained in area, compared to last year, with paddy, coarse cereals and pulses accounting for two million hectares of additional acreage, each. The crop condition is generally satisfactory, as per reports. Diseases and pests have remained largely below the threshold mark in most places.

Surge in rainfall in late August has resulted in rapid rise in total water stock of 81 major reservoirs. It stood at 82.793 billion cubic metres on 26 August 2010, which is 31% above the last year’s corresponding level and just two per cent below the long-period average. However, there is still some worry about water storage in 36 dams which have hydel power units attached to them. The water level in 23 of these is still below normal.

The India Meteorological Department (IMD), in its monsoon forecast update issued on 27 August 2010, has predicted 15 per cent above-normal rainfall in September. This will be a parting gift as the monsoon normally begins withdrawing from the western-most part of Rajasthan from September 1.

The south west monsoon is important for India as about 60% of the country’s farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The weather office expects this year’s monsoon rains to be at 102% of the long-period average. If the southwest monsoon for the June-September monsoon season turns out good and if it is well distributed, it will help raise farm output, boost rural incomes and lower food inflation.

Coming back to stocks, the key benchmark indices slumped on Friday, 27 August 2010, on worries over the pace of the US economic recovery. US is the world’s biggest economy. The BSE 30-share Sensex lost 227.94 points or 1.25% to 17,998.41 on Friday.

Foreign funds sold shares worth Rs 108.16 crore on Friday, 27 August 2010, as per provisional data from the stock exchanges. Domestic funds bought shares worth Rs 239.60 crore on that day.

This post is shared on the moneyvidya blog by Dead Presidents. Please visit http://deadpresident.blogspot.com to see DP’s personal blog/website.

The undertone was weak on Friday and nifty closed on a negative note at 5408, a fall of 69 to its previous close.

As nifty has breached the 5450 level on closing basis, further selling is expected in today’s trading, a break below 5400 can drag nifty to 5370 and then 5325 levels and on the higher side a break above 5450 level can take the nifty to 5510 level, Nifty to range in the range 5370 to 5470 levels, either side break to give a new direction the market.

Overall the trend looks bullish in the near term due to FII inflow and good liquidity in the system, hence we suggest traders to remain long with a stop loss of 5370 and investor can take the corrections from time to time as a buying opportunity in blue chips and as well as undervalued mid cap stocks.

In today’s trading traders are advised to be cautious with a positive bias as lower level buying is expected.

On global cues market to open on flatt note and to trade with positive bias in the morning session thereafter can come under selling pressure in the second session.

Nifty to have support at 5400/5370/5350 and resistance at 5425/5450/5470 for the day.

This post is shared on the moneyvidya blog by Antony Joseph Rajendran. please visit http://www.investorinfo.in/ to see Antony’s personal blog/website