Mind of Investor- Check Nifty Graph

http://akprabhakar.blogspot.com/2010/11/sensex-nifty-diwali2008-diwali2010.html Sensex & Nifty Diwali2008-Diwali2010-106weeks a Comparison

This was interesting picture of Investors mindset someone has posted so posting here to everyone benefit. NIFTY & the below picture look same and i am not giving any message investor should take informed decision.

Look at the Other Side

This is very good short story many time in life we forget to take alternative view or we never put ourselves in other’s shoe before we think of any solution for a problem. This holds good in stock market too please take all possibilities and probability before you take any informed decision.

Look at the Other Side ... ...

A Father was reading a magazine and his little daughter every now and then distracted him.

To keep her busy, he tore one page on which was printed the map of the world.
He tore it into pieces and asked her to go to her room and put them together to make the map again.
He was sure she would take the whole day to get it done.

But the little one came back within minutes with perfect map...
When he asked how she could do it so quickly, she said "Oh... Dad, there is a man's face on the other side of the paper...
I made the face perfect to get the map right."

She ran outside to play leaving the father surprised.


Moral of the Story:
There is always the other side to whatever you experience in this world.
Whenever we come across a challenge or a puzzling situation, look at the other side...
You will be surprised to see an easy way to solve the problem…

MICRO Finance will this Business sustain

Whenever an investor selects or buys a stock one should evaluate if the business model sustainable in next 5-10-15-20years and when you buy a stock a futuristic business model should be in place. We have seen many business model collapse .DOT.COM in 2000 is one good example. Finance has been one best business model for centuries but when political intervention is there it will ruin as we know PSU bank lending before.

Micro Finance as we understand is to take financing @ affordable to masses of the society it would be best suited for non-profit organization and when that is the case profits would be hard to come. I doubt if Micro finance is sustainable model in India which is politically very sensitive and Re.1 Rice+ free Color Television and many more freebie scheme to make poor poorer is realty.

 

Very good article read few comment from politicians who say don’t pay money and article also states this was one reason for U.S Subprime. Lending Money is very bad business and it is done only by rich and they should forego has been mindset for long.

http://online.wsj.com/article/SB10001424052702304316404575580663294846100.html

The micro lending movement that was supposed to help lift millions of people in India out of poverty has in recent weeks fallen into chaos. Urged on by local government officials and politicians, thousands of borrowers have simply stopped paying lenders, even though they have the money. The government has begun ratcheting up restrictions, fearing that borrowers are being buried by usurious interest rates. In some cases, officials have even arrested lending agents for allegedly harassing borrowers.

Local politicians, meanwhile, have blamed dozens of suicides on microlenders and are urging borrowers not to pay back what they owe.

The crisis is in some ways reminiscent of recent debt problems in the U.S. Microfinance is targeted at a population that is overlooked by the mainstream banking industry, the same social niche targeted by payday and subprime lenders in the U.S.
http://akprabhakar.blogspot.com/2010/10/sksmicrofinance-avoid-let-dust-settle.html  SKSMICROFINANCE-Avoid let the dust settle -Avoid –SKSMICROFIN Cmp Rs.1135
The Andhra Pradesh government has appealed to the bankers to extend revolving cash credit to the poor women in a bid to prevent them from seeking loans from microfinance institutions (MFIs). MFIs have been in the news over the recent months allegedly for driving a huge number of their loan-seekers to suicides. Strong arm tactics have led to violence and in an incident yesterday, a girl committed suicide after being beaten by four loan recovery agents who were hunting for her mother. http://www.financialexpress.com/news/women-to-flee-microfinance-institutions/702258/
http://blogs.wsj.com/indiarealtime/2010/10/25/indias-microlenders-still-struggling/ 

India’s microlenders this week are anxious to see whether they will actually be allowed to start distributing and collecting payments for the tiny loans they make to poor borrowers.

India 3rd largest trade deficit-Option danger

News flow in week which are interesting

India is the 3rd largest merchandise trade deficit after the US and the UK, according to data from the WTO’s just-released International Trade Statistics 2010. And BL say India can become 2nd while many countries with trade surplus are worried about currencies, “Some emerging G-20 nations like South Korea, Brazil and Indonesia, which have recently taken action to curb their currencies, have blamed loose U.S. monetary policy for the massive capital inflows for pushing their currencies up. China has even branded it "irresponsible." India strong rupee has started to impact exports, while imports are becoming cheaper. Steel which saw price hike can see price cut as production in china has increased as power rationing eases, Globally also Steel prices have started to soften.

http://www.thehindubusinessline.com/2010/10/22/stories/2010102253260400.htm  India has the world's third largest merchandise trade deficit after the US and the UK, according to data from the World Trade Organization’s just-released International Trade Statistics 2010. The Commerce Ministry has projected India's trade gap to touch $135 billion during 2010-11, though this figure pertains to the fiscal year ended March 31, 2011, whereas the WTO data is based on calendar year. If the $135 billion projection holds for the calendar year as well and there is no change to the UK's $129 billion number – both not wholly unrealistic assumptions – India's trade deficit would end up being next only to the US.

Many use option & futures aggressively to make fast money and range bound in last 10months made many to write options, as I always carry a view that Option is a Ice-cream it will melt once taken out of freezer. Even today of the total open interest position of overall market Rs.1,92,021crs Options alone is Rs.1,17,342crs and bets in Nifty option alone is Rs.1,06,769. Many new timers want to use Option & Futures even without understanding is the biggest worry.

Aditya Birla Money MD quits after bets on Nifty go wrong- firm accepted employee stock options of these officials as margins for these trades. “Fund managers of the scheme bet that the index and stocks would continue to move in a thin band. But the markets surged unexpectedly resulting in these losses,” said a head of a wealth management arm of a private bank. http://economictimes.indiatimes.com/news/news-by-company/corporate-announcement/Aditya-Birla-Money-MD-quits-after-bets-on-Nifty-go-wrong/articleshow/6777543.cms

China hike rate global market corrects shipping rates fall, Steel prices softens and now GDP growth is slowing as per data released by China and this normally impacts global commodity markets.

China c.bank warns of inflation, asset bubble

BEIJING, Oct 21 (Reuters) - Inflation and asset bubble risks could increase sharply in China, and counter-cyclical loan controls are needed as a line of defense, central bank governor Zhou Xiaochuan said in comments published on Thursday. China, which saw its banking system come through the global financial crisis largely unscathed, is grappling with a raft of potential dangers, Zhou said.

INTERVIEW-China needs more rate rises this year -government researcher

BEIJING, Oct 20 (Reuters) - China needs to raise interest rates at least once more this year to ensure that the red-hot property market can be effectively cooled, a government researcher told Reuters. Wang Xiaoguang, a researcher at the Chinese Academy of Governance, an advisory body to the central government, said Tuesday's increase of 25 basis points was not drastic enough to produce the government's desired effect.

6lakh investor exit MF & IIP data

This was most interesting as 6lakh investor exit MF account in month of September alone, but silver lining is the same data shows HDFC has added 41thousand new folio So I am happy Indian investor are taking informed decision. FIIs investing and Indian funds selling both aggressive is really a surprise for retail investor. India is one emerging market where there is no capital restriction while other countries have imposed bigger restrictions due to currency appreciation.

http://www.thehindubusinessline.com/2010/10/12/stories/2010101253370100.htm  The mutual fund industry suffered a 5.8 lakh reduction in folios this September as investors closed accounts to book profits in a buoyant market.

View-IIP data drops to 15months low mainly on account of Capital Goods which registered 72% growth in the month of July has turned negative, contracting by 2.6% in August year-on-year, compared with 9.2% growth in August last year. I don’t know how the data can be so erratic but already http://tinyurl.com/25h3zfd few data have been question by analyst and even by RBI, as erratic data would make it difficult to frame policy. Capital Goods stocks have already turned Negative with BEL-BHEL-BEML-BRGENEGRY-LT-JYTOHISTRUCTURE-PRAJIND seeing selling pressure.

http://www.thehindubusinessline.com/2010/10/13/stories/2010101353420100.htm  Industrial growth drops to 15-month low of 5.6% in August.

Good monsoon rains and higher estimates of crop acreage will help agricultural production grow by 7.2% in 2010-11, after recording a 6.6% decline in the drought-hit previous financial year, according to CMIE, CMIE also pegged the GDP growth at 9.2% in 2010-11 on the back of sustained robust growth in manufacturing and services sectors. Already Fertilizer stocks are on move and other allied industries could also perform GSFC, UNIPHOS, INSECTICIDES, TATACHEM, NFL are still looking good

http://akprabhakar.blogspot.com/2010/10/sksmicrofinance-avoid-let-dust-settle.html  This newly listed stock which has traded just 44trading days has been in news in last few weeks for all negative reason.

Revised lots for F&O, NMDC is positive stock after coming into F&O

SEBI has advised exchange to standardize lot size for derivative contracts on individual securities once in every 6 months as per circular no. SEBI/DNPD/Cir- 50/2010 dated January 8, 2010. In pursuance to the revised methodology mentioned in the SEBI circular, it is proposed to carry out revision of market lot for derivatives contracts as follows (Download Circular attachment): http://www.4shared.com/document/Pzp4hYdC/Revision_of_Market_Lot.html

NMDC has been brought into F&O Segment which can be positive for the stock in short-term, stock can return 7-9% soon.

Wonderful video www.andiesisle.com/creation/magnificent.html

News Update

There are many interesting news flow- one is our Prime Minister speaking to Media where he has said that he is not retiring and Cabinet reshuffle is on cards and differences between minister’s & government and party is normal nothing to worry about. Election is near and now we will hear more of our Prime minister who next day said, “China is seeking to expand its influence in South Asia at India's expense”. This is one major issue many are talking and now we hear from our PM also but important was this was an off-record comment which was published. But important for us is China is a concern.

http://blogs.wsj.com/indiarealtime/2010/09/08/will-media-setback-silence-mr-singh/  Will Media Setback Silence Mr. Singh?

China is seeking to expand its influence in South Asia at India's expense, Indian Prime Minister Manmohan Singh warned in rare public criticism of his country's rival for regional resources and geopolitical clout.

http://in.reuters.com/article/idINIndia-51323020100907

PM hints at Cabinet reshuffle; says he is not retiring ---Rejecting perceptions that there was a disconnect between his government and the Congress party, Prime Minister Manmohan Singh said on Monday that expression of different view points was not "necessarily a bad thing". He did not see anything wrong in ministers and party functionaries expressing different points of view because the Congress party itself was a movement within which there have been differences of opinion as happens in a democracy. http://economictimes.indiatimes.com/news/politics/nation/PM-hints-at-Cabinet-reshuffle-says-he-is-not-retiring/articleshow/6505756.cms

IIP data due on Friday when market holiday would be important as indication are that it would be single digit growth as base effect increase and Global growth pressurizing Indian Export.

http://economictimes.indiatimes.com/news/economy/indicators/July-industrial-output-growth-seen-up-77/articleshow/6519158.cms  Industrial output growth probably picked up to 7.7 per cent in July from a year earlier, the median forecast of 21 economists showed. Annual growth had slowed in June to 7.1 per cent from 11.5 per cent in May.

TECH stock Woes continue after U.S state Ohio banned outsourcing of Government IT and back-office projects to offshore locations such as India and fear is if other states also follow this. Unemployment is a major issue and Indian IT sector would be target of Developed nation due to political compulsion. 

The US state of Ohio has banned outsourcing of government IT and back-office projects to offshore locations such as India, raising fears of similar moves by other American states struggling to cope with high unemployment rates. 

http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/For-FIIs-DTC-is-a-cause-for-worry/articleshow/6509714.cms

Indian software companies such as Infosys Technologies and Wipro are entering the unfamiliar area of vendor financing, at the urging of cash-strapped US customers, by using reserves accumulated over years to invest in so-called software platforms that run activities like payroll processing. http://economictimes.indiatimes.com/infotech/ites/Indian-IT-funding-cash-strapped-client-projects/articleshow/6502902.cms

Infosys will never be the same after Murthy: Thomas Friedman http://economictimes.indiatimes.com/tech/software/Infosys-will-never-be-the-same-after-Murthy-Thomas-Friedman/articleshow/6518274.cms    Thomas Friedman, Commentator and New York Times columnist said that IT bellwether, Infosys will never be the same after chief mentor and chairman Narayana Murthy retires from the company. Murthy said on August 10 that the company co-founded by him will get his suitable successor well in time before his retirement in August 2011.

Global News : Europe is back in news and

Germany will not support prolonging rescue mechanisms to underpin the euro indefinitely because too much help would damage the European single currency, Chancellor Angela Merkel said on Tuesday. Germany, which has shouldered the biggest share of risks in a bailout of Greece and a 750 billion euro package assembled to protect the euro currency, has been pushing for tougher budget rules to avoid a repeat of the euro debt crisis in future.  http://www.moneycontrol.com/news/world-news/germany-wont-back-euro-rescue-fund-for-ever-merkel_483391.html

Equity Funds Have Biggest Outflows in 14 Weeks at $6.87 Billion, EPFR Says http://www.bloomberg.com/news/2010-09-07/equity-funds-have-biggest-outflows-in-14-weeks-at-6-87-billion-epfr-says.html A total of $6.87 billion was taken out of stock funds in the week ended Sept. 1, while bond funds took in a net $3.83 billion, EPFR said. Investors also withdrew $4.1 billion from money-market facilities and took $1.1 billion from balanced funds. Emerging-market equity funds received about $250 million, most of which was received by global emerging funds, and emerging-market bond funds also had net inflows for a 14th straight week, the fund tracker said.

GDP Numbers questioned by Economists

Indian GDP numbers where 8.8% economy grew at its fastest pace in over two years in the April-June quarter but few economists have questioned the accuracy of the data. This is Just for information to investors to take informed decision.

http://lite.epaper.timesofindia.com/RepositoryET/ETM/2010/09/01/11/Img/Ar0110201.png  

Many economist have voiced concern on the data from HDFCBANK, NOMURA, KOTAK and ANANDRATHI

http://business-standard.com/india/news/factory-pmi-slipsgrowth-still-strong/107263/on  The HSBC Markit Purchasing Managers' Index , based on surveys of 500 companies in Asia's third-largest economy, fell to 57.25 in August from 57.6 in July, but remained well above the 50 mark that divides growth from contraction. India's manufacturing sector expanded for the 17th successive month in August, although at a slightly slower pace than in July, supported by strength in new orders.

http://economictimes.indiatimes.com/news/economy/indicators/Economists-question-88-Q1-GDP-growth-number/articleshow/6471484.cms  “The divergence (of 5.1%) is at a record high and also inexplicable... Two-thirds of the demand-side GDP growth in the first quarter of this year is because of discrepancies. Excluding discrepancies, 1.4% growth was one of the lowest since start of the quarterly data in the first quarter of FY00,” said Sujan Hajra and Gautam Singh of Anand Rathi Financial Services.

News that impact stocks & Market

There are few news flows which would impact market CARE report on Bank NPAs to touch 3.5% by 2011 would give profit booking in these stock where very good rally in the last 18months was seen and rising deposit rate can hamper profit. Core sector Growth slows in July with Crude & refiner’s saving grace while STEEL & CEMENT drag which can show in IIP data to be released on September 12th.

Bank gross NPAs to touch 3.5% by March 2011: CARE, Reflecting the trend of sizable chunk of restructured assets turning into bad loans, rating agency CARE has pegged Indian banking sector’s gross non-performing assets (NPAs) at 3.5 per cent of gross advances by March 2011. http://www.business-standard.com/india/news/bank-gross-npas-to-touch-35-by-march-2011-care/405975/  

Core sector output grows 3.9% in July Industrial output rose by 7.1 per cent, the slowest pace in last 13 months http://www.business-standard.com/india/news/core-sector-output-grows-39-in-july/406144/  

Steel output-

Steel production slumped by 0.9% as against a growth of 4 per cent in the same month last year. The country only produced 4,657 thousand tonnes of steel this July (4697 thousand tonnes).

http://economictimes.indiatimes.com/Jobs//articleshow/6437580.cms  High attrition rate hits IT companies' bottom lines

Facts taken please read careful: U.S. Federal Reserve Chairman Ben Bernanke has said economy is weak and he would support if needed. Note Raghuram Rajan accurately warned central bankers in 2005 of a potential financial crisis if banks lost confidence in each other. Interest rates near zero risk fanning asset bubbles or propping up inefficient companies, say Rajan and William White, former head of the Bank for International Settlements’ monetary and economic department.

U.S. Federal Reserve Chairman Ben Bernanke said on Friday the economic recovery has weakened more than expected and the Fed stands ready to act if needed to spur slowing growth. http://in.reuters.com/article/idINIndia-51116920100827  

http://economictimes.indiatimes.com/news/international-business/Bernanke-must-raise-benchmark-rate-by-2-points-Raghuram-Rajan/articleshow/6423598.cms  Bernanke must raise benchmark rate by 2 points: Raghuram Rajan

Tata Steel-owned Corus has tentatively agreed to sell the beleaguered Teesside Cast Products (TCP) plant to Thailand's Sahaviriya Steel Industries (SSI) for a price of £320 million (Rs 2,325 crore). http://www.business-standard.com/india/news/corus-inks-draft-teesside-sale/406134/

IDBI Bank has received the best public sector bank award for financing small and medium enterprises (SMEs) from global business information provider Dun and Bradstreet http://economictimes.indiatimes.com/Banking//articleshow/6445449.cms  

Benefits of reading research report

Today we live in a world of free flow of information and so many channels, newspapers, brokers reports and analyst reports are available, but never will all views be  similar and it can’t be. Investors and traders should be smart to take informed decision on their investments or trading calls as you have control of your money and investment. http://prabhakar-views.blogspot.com/2010/02/caution-to-investors-from-sebi.html

Benefits of reading reports-one should understand low equity, low market capitalization or shady management stocks normally do not get coverage from analysts. Today there are so many penny stocks or small cap stocks which are @ crazy valuations which do not have fundamentals. So investors should check more details about these companies, news flows on these companies and there are many websites which can contribute for investors. 

http://www.nseindia.com/content/corporate/corpinfo.htm  

http://www.bseindia.com/sensex/research.aspx  

http://www.moneycontrol.com/  

http://www.edelweiss.in/Tools/screener.aspx  

http://money.livemint.com/LiveHome/Default.aspx  

http://indiaearnings.moneycontrol.com/home.php  

http://www.business-standard.com/india/common/bslogin.php?ref=/portfolio/index.php  

http://portfolio.economictimes.indiatimes.com/default.do?expire=true  

Some Paid sites

http://www.capitaline.com/new/index.asp  

http://www.cmie.com/index.php  

http://www.infinancials.com/  

http://www.factset.com/  

These are a few websites which would help investors track their investments and any news flows also can checked, financials and other relevant data can be taken.

CAUTION: Investors have limited time to do detail study or lack of understanding as they don’t know how to make best use of this information. For them my advice would be to take mutual fund route. Mid size Research house has 40-60 people how a single investor who can’t make company visit can make best use so much information available to him.

Take Informed Decision On Unknown Companies

Many unknown and smaller stocks have moved higher in recent past while Nifty & Sensex have literally remained lackluster. A large percentage of these stocks are not backed by fundamental value and are just moving on euphoria. LOTUS EYE is one such stock where rumours were abound as to it would be a takeover candidate after Fortis-Parkway deal both of which didn't happen ultimately and then the stock moved down. Investors are advised to check fundamental truth before entering such unknown stocks as many times it is just out of thin air and then nothing works out. Many times investors make money in these stocks but still get stuck as liquidity goes missing.
www.astersilicatesltd.com   Aster Silicates Listed in NSE saw high of Rs.258 now Rs.73 -----this price erosion is less than 15days ---Newly listed stock--- Please take informed decision on stock like these where no track record is known--- Newly listed stock is like a new born baby it is like WIN BIG & LOSE BIG

LOTUS EYE

PENNY STOCK & many other Small Cap stock are in over valuation ---- if u buy Value  and market corrects u can average but stock which do move for years --- CAUTION -- http://www.thehindubusinessline.com/2010/07/23/stories/2010072353251200.htm  penny stocks spurt-  Invest only in Value stock –
Irrational exuberance again? Select P/E ratios skyrocket http://economictimes.indiatimes.com/markets/stocks/market-news/Irrational-exuberance-again-Select-P/E-ratios-skyrocket/articleshow/6254238.cms

(Common)Wealth is not spent well!

India is hosting Commonwealth2010   http://www.cwgdelhi2010.org  in next 53days and now many news report put India as a corrupt & inefficient country. While red tape bureaucracy is still there in India, its far less than what it was 2 decades ago.

Could we have dreamed of being such an enormous super power when it comes to internal growth and advancement?
There are many sporting events conducted in many countries to showcase the development of the country and where is our development coming? I strongly feel that our liability of a 110 crs population has so far turned out to be a strong asset creating sufficient consumption and higher GDP. While we lack in most sports or the infrastructure required for them, we have a strong possible chance of improving. CWG is going to play a very vital and key role in this, irrespective of corruption acquisitions if the presentation and games are a success, it will open the way for us to bid for OLYMPICS in the near future. Also all developed countries vie for India, a prime example is India doing exceedingly well in the 90S' decade in PAGEANT CONTESTS, the reason was clear, almost every cosmetic premium brand wanted to make an entry into India, and what better way than glamour and acceptance.

Stock market upper freeze on 18/May/2009 after election result as market anticipated a Government without Left party support would do faster reforms and function efficient. However, now it appears that we have WELL BEGUN and are HALF DONE. The reforms in the last 1 year have been slow add to that has been the change in global attitude specially US towards out-sourcing. If we dont catch up with reforms then we can have a major crises in hand, like what happened in INDONESIA, THAILAND and RUSSIA. During the recession in developed nations in 2008-09 we came out least effected cause we had a very balanced monetary policy whereby economic development was not compromised for neither excessive growth (leverage) nor spending (subsidies). However, now things do not appear to be so clear, as even global economies are also changing policy so we need to fasten our change in policy or we shall lag behind.

India with 110crs more of people should have need frequent, faster, and efficient + hassle free Railway system and now one should book minimum 1month in advance to travel in train and where Chinese train travel in 2hours we take 8-10hours to reach In the last 2 quarters all railway wagon manufacturers have reported drop in capacity. While we get to know of new trains every budget, we are yet to see proper infrastructure development and planning. The negative side of the story is we are not executing and planning well, the positive side of the story is that we can still develop a lot thereby creating strong growth steadily http://prabhakar-views.blogspot.com/2009/12/need-for-speed.html

2016 Olympic Games - Rio de Janeiro - Rio is Ready --- http://www.rio2016.org.br/en/PorqueRio/

NIFTY-BSE SENSEX and Indian Market view

Markets has tendency of topping out in the first month of every quarter

 

Nifty (5387) has closed Negative -81points making this biggest losing week in previous 10weeks NIFTY 5477 looks fancy to be a Top on weekly closing basis 5449 was last week close so till these levels doesn’t cross market to face selling pressure but close below 5350 would be important. Markets has a tendency of topping out in the first month of every quarter October 2009 5181 was breached in January2010 5310 and next high was made in April2010 5399 and now July2010 high of 5477 has to be watched. Breaking below 5350 we can possibly see 5240 & 5100 on the downside.

 

BSE SENSEX (17868) Sensex has broken away from rising trend line and in the last 5trading days the Index is making lower highs and lower low 100DMA=17420 & 200DMA=17116 are important support on downside and rally till 18300 is not crossed could be pull back rally. Sensex below 17390 on closing basis only would confirm bigger correction

ABB Open Offer Over - what next?

This is an update to the previous post on ABB Open Offer - http://prabhakar-views.blogspot.com/2010/05/abb-open-offer-would-you-buy-now.html


Swiss Engineering company ABB has successfully acquired 75% stake in Indian unit - ABB's  open offer has got over subscribed, report CNBC-TV18, quoting sources. LIC and ICICI Prudential life tendered a part of their holding in the offer. Wherein, LIC tendered 50% of its holding and ICICI Prudential tendered 70%. ABB open offer was for 23% stake at Rs 900 per share.
Now ABB (Parent) holds much larger stake in the Indian subsidiary and it gives them better management control too. We don't know yet if the parent wants to delist the company from India after buying remaining 25% stake too in the future but now that looks like only trigger if price has to move up.
Stock of ABB may not perform going ahead as poor performance continues - ABB Ltd India suffered a second-quarter net profit decline of 54 per cent year-on-year to Rs 38.3 crore (Rs 83.60 crore). The power and automation technologies major attributed the fall to increased pressure on pricing and continued costs on exit from the rural electrification business. Sales revenue dipped nearly 4 per cent to Rs 1,446 crore year-on-year (Rs 1,505 crore) on account of delayed orders worth Rs 8,531 crore for the first six months ended June. The latest quarter saw orders worth nearly Rs 1,235 crore.

STEEL View and news

CLSA in its report on 14/July/2010 report on Indian Steel sector has said. “Cost of iron ore and coking coal of steel is set to decline by US$62/tonne in FY12 and headline steel prices should also plummet”. This would be Negative for TATASTEEL, SAIL & JINDALSTEEL which have captive mines positive for company’s converters like BHUSANSTL & JSWSTEEL the report said.

China which is facing overcapacity + China steel almost in the red as prices fall –CISA report says. Whenever China sees a problem they can flood the market so investor should take informed decision as Commodity prices are cooling globally on growth concerns, if India has high price this could become a Dumping ground, Lower Steel Prices can benefit user industry.

News Collected.
Rio Q2 iron ore output dips, flags China risks

SYDNEY, July 14 (Reuters) - Rio Tinto on Wednesday reported a 2 percent fall in second-quarter iron ore production from a year ago and raised concerns of a possible double-dip recession and slower Chinese growth. Still, the world's No.2 iron ore miner said it was running its mines close to capacity and forecast total 2010 output of 234 million tonnes, slightly up on an earlier forecast and ahead of 2009's 217 million.

Two major China steel mills guide August prices lower

SHANGHAI, July 13 (Reuters) - Two of China's top steel mills cut some August prices on Tuesday, bowing to pressure from slowing demand in major steel-using markets that has already forced many of their rivals to cut production. Baosteel, one of the top three steelmakers in China and the world, kept some of its prices unchanged but cut others by up to 300 yuan ($44.31) per tonne, or around 5 percent from July, marking a second successive month of falling prices.

China steel almost in the red as prices fall -CISA

SHANGHAI, July 16 (Reuters) - China's massive steel sector, which has begun cutting production in the face of falling prices and softening demand, is nearing the break-even point, the China Iron & Steel Association (CISA) said on Friday. "Most steel products prices have extended falls in July, to a level almost below the mills' production costs, and this will continue supporting prices," CISA said in a statement on its website.

The July-September period will see erosion of profitability of steel companies as the gloomy demand scenario would prevent them from hiking rates amid high input cost pressure, a government official said today. "The current quarter would be the weakest link in the financial year 2010. Margins, profitability of steel companies will take a hit amid high input cost pressure, sluggish demand scenario,” Joint Plant Committee Chief Economist A S Firoz told PTI.

Stocks in India to Cap Gains on Valuations, Downgrades, Merrill Lynch Says

India’s benchmark stock index, the best performer among measures for the 20 biggest equity markets last quarter, may cap gains after share prices exceeded the outlook for earnings, Bank of America Merrill Lynch said. “Markets are slightly on the higher side of valuations,” Jyotivardhan Jaipuria, head of research at the local unit of Bank of America Merrill Lynch, said in an interview in Mumbai yesterday. “We will have a spell of earnings downgrades now which is largely driven by what’s happening around the world.” http://www.bloomberg.com/news/2010-07-13/indian-stocks-to-cap-gains-on-valuations-downgrades-merrill-lynch-says.html  

Dow below 1000 in 5-6yrs says Elliot analyst Robert Prechter

Below given are collections of information about Robert prechter and only a chart I have put this is just to create awareness about a great Elliot Wave analyst. I have also Baltic Index data which shows Global trade is dwindling. Read the view for education purpose and take informed decision.

Robert R. Prechter, Jr. (b. 1949) is an American author and stock market analyst, known for his financial forecasts using the Elliott wave principle. Prechter has authored or edited 14 books, including Conquer the Crash, a New York Times bestseller. http://en.wikipedia.org/wiki/Robert_Prechter  

Robert Prechter http://www.elliottwave.com/info/prechter_bio.aspx  

Robert Prechter, an Elliott Wave technical market analyser predicts the Dow will fall to below 1,000 in a severe once in 300 years correction. The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.” http://www.nytimes.com/2010/07/04/your-money/04stra.html?_r=2  In 2002, he published “Conquer the Crash,” which predicted misery ahead. Even so, he said in 2008 that the market would soon rally sharply — then said late last year that stocks were about to fall and that the great decline would resume.

For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people “from buying stocks for 100 years,” he said. This time, he said, “If I’m right, it will be such a shock that people will be telling their grandkids many years from now, ‘Don’t touch stocks.’ ”

Recollect South sea  I can calculate the motions of heavenly bodies, but not the madness of people."  http://prabhakar-views.blogspot.com/2010/05/isaac-newton-lost-million-in-stock.html  Isaac Newton, Lost $2.72 Million in the Stock Market, Still the Best Scientist

DOW (10198) Charts

Baltic freight index slides to 14-month low

LONDON, July 7 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest level in over 14 months on Wednesday due to weak cargo activity. The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, fell 5.12 percent, or 109 points, to 2,018 points in its 30th consecutive decline to remain at its lowest since May 5 last year when it fell below the key 2,000 point level.

http://www.bloomberg.com/apps/quote?ticker=BDIY:IND  Baltic index below 2000 now

Recession or Depression impact for investor

If Recession or Depression happens what would be impact for investor as these things are said after it has happened only and not before

I have seen 2Double dip recession one in 1990-1992 it was very early for me to understand the other was 2001-2003 and this was worst period to be an analyst in simple words Rs.100 stock became half and then became half and there was no stopping for price erosion, in 2002 & early 2003 if I talk about Stock market people use to hate me and then came a time from April/2003 Nifty from a low of 920 has made a high of 6357 by January/2008 in 5years stock market gave more than 5times returns and most analyst, investor and traders today have not seen worst of market what happened in 2008-2009 crash is just a blip and recovery was also fast, so pain was less comparatively.

Now Indian Government in my view has prepared itself for the worst and PM has already warned of Double Dip recession in G20 summit and the strong decision to raise fuel in my view is to save funds today for any fresh stimulus tomorrow.

Nobel Prize-winning economist Paul Krugman talks about Depression which I have never seen or my 70 years old father so I would lack experience to face this. I do not have record of market behavior to understand how market behaved in India. India with strong growth will not be impacted as much as Globe but we will not be isolated as RBI in a statement said, “India has become more vulnerable to slowdowns and financial crises abroad as foreign trade plays a bigger role in the economy -Trade represented 35% of GDP for the year to March 31, 2008, up from 21% a decade earlier”.

So investors should understand that many of analyst and investor lack experience to handle a global crisis and my simple advise is Market in long term 5-6years can also give good gains. But many so called investor are today 6months to one year where I advise then to take informed decision as we can only say the impact after it happen and not before it can happen.

The Third Depression By PAUL KRUGMAN

http://www.nytimes.com/2010/06/28/opinion/28krugman.html?_r=2  Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31. Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

Double Dip Recession http://www.investopedia.com/terms/d/doublediprecession.asp  

The causes for a double-dip recession vary but often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn. A double-dip (or even triple-dip) is a worst-case scenario. Fear that the economy will move back into a deeper and longer recession makes recovery even more difficult.

Prime Minister Manmohan Singh today warned that fiscal contraction across industrialized countries could result in double-dip recession. http://www.business-standard.com/india/news/fiscal-contraction-can-cause-double-dip-recession-pm/399644/  
http://graphics.thomsonreuters.com/10/GLB_CYC.swf Double Dip Monitor

US Payrolls

US Unemployment

News to watch

Monsoon progress halted again over west coast, An itinerant western disturbance with associated dry north-westerlies was seen interfering with the progress of the monsoon along the west coast on Thursday.  http://www.thehindubusinessline.com/2010/06/18/stories/2010061852661900.htm

http://www.thehindubusinessline.com/2010/06/18/stories/2010061853491100.htm  Cement sector hit by excess capacity    The sharp fall in demand on the back of excess capacity and onset of south-west monsoon may hamper the profitability of cement manufactures for the next few quarters.

Reliance Industries Ltd. should cede its rights to a petroleum exploration block off India’s eastern coast, the Mint newspaper reported, citing a recommendation to the government by the Directorate of Hydrocarbons. The advise was given after the company missed a deadline to declare the block commercial viable, the newspaper reported, without saying where it got the information.

The Securities and Exchange Board of India (SEBI) has banned an equities dealer of HDFC Asset Management from stock market transactions for allegedly leaking information of its trades to three market participants in advance. The trio, too, have been barred from stock market transactions until further notice. In its order late Thursday, the market regulator revealed instances where investors Rajiv Ramniklal Sanghvi, Chandrakant P Mehta and Dipti Paras Mehta placed orders in the same set of stocks, just before those were traded by dealer Nilesh Kapadia on HDFC AMC’s behalf.

Option data highest ever

Option data shows that FIIs Outstanding position in Nifty option alone is Rs.50, 924crs while total Option Outstanding position is Rs.89,549 crs and futures position is Rs.56, 418crs which clearly indicate that majority have built position in option as market has been range bound for than 8months now, sooner than latter major move can upset the market calculation as many traders and investor have built strategy in this. PCR above 1.50 indicates excess positions in Puts and if crucial support levels get broken panic selling can be high. Distribution below shows 5300 would be crucial resistance, failure to move past that can bring selling once again into markets and 5000 can act as strong support as per derivative data below which panic up to 4800 and lower also can be seen.