Equity View:Indian equity markets were flattish last week with a correction of 0.75% from previous week’s closing. Indian equity marketshave witnessed a pause in the upward rally from last couple of weeks. This is due to the Union Budget turning out a non- thevent and no rate cut being announced in RBI’s Monetary Policy on 15 March 2012. Markets would now look for Q4 thearnings which would start from 10 April 2012. Our own sense is that the Q4 earnings would be in range of 10%-12% year- rdon-year basis. We believe the earnings have bottomed out in 3 quarter and this quarter might deliver slight improved thearnings for large Nifty companies. The next monetary policy review is scheduled on 24 April 2012 in which we expect theRBI to cut the repo rate by 25 basis points.Manufacturing and PMI data for China & Germany were announced last week. The data was below consensus expectations.With renewed concerns of hard-landing scenario in China the commodity markets have seen correction with oil being theexception. Government of China came out with a set of guidance for the Chinese GDP growth numbers at about 7.5 %, wewould consider this number as “floor” rather than “ceiling” on the Chinese growth numbers. The Chinese government hasbeen guiding the growth for the last 15 years and they have always held a very conservative target and actual growth that isclocked is significantly higher than what the government has mentioned. Hence, we could see some kind of moderation ingrowth to 8.5% levels from 10% plus levels that China has been witnessing for several years now.Last week we saw the merger of Tech Mahindra and Satyam Computers. With this development it would close the uglychapter of the Satyam Computers fiasco which happened in the year 2009-10. Satyam Computers will be fully merged withTech Mahindra and the merger ratio has been announced at 1:8.5. So, for every 8.5 shares of Satyam held, the investor wouldget one share of Tech Mahindra. This merger would lead to creation of fifth largest IT Company with revenues of around $2.5billion. We see this as a positive development in terms of India’s capability to handle a scam of that magnitude and finallycurtains have been drawn on that chapter. We believe that Tech Mahindra would start bidding for bigger orders and wouldpose a serious challenge for other Tier-1 IT players.News:DOMESTIC MACRO: The Reserve Bank of India is not uncomfortable with the recent surge in government bond yields and is unlikely to use debt buys through open market operation as a tool to contain the rise in yields, three central bank officials said. The Reserve Bank of India has said all non-banking finance companies that lend against gold collateral should maintain a loan-to-value ratio not exceeding 60% for loans granted against gold jewellery. The year-on-year credit growth of Indian banks was broadly in line with the Reserve Bank of Indias projection of 16.0% rise in the current financial year which ends on March 31, data released by the central bank showed on Wednesday. As of March 9, banks deposit stood at 58.53 trillion rupees, while advances amounted to 44.87 trillion rupees, data released by the RBI showed. Credit grew 16.29% from a year earlier, while deposits were up 13.78%.GLOBAL MACROEuro: Greece must strictly adhere to the reforms agreed with its international lenders to regain market confidence and help its economy recover, the countrys central bank said in an annual monetary policy report on Monday.
US: The number of Americans claiming new unemployment benefits dropped to a four-year low last week, offering further evidence the jobs market recovery was gaining traction. Initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 348,000, the lowest level since February 2008, the Labor Department said on Thursday.China: The HSBC flash purchasing managers index, the earliest indicator of Chinas industrial activity, fell back to 48.1 for month of March from Februarys four-month high of 49.6. New orders sank to a four-month low, an expected rebound in export orders failed to emerge and new hiring slumped to a two-year low.
Swapnil Pawar Varun Goel Jharna AgarwalPalak Nanjani Abbas Naheed Kanika Khorana DisclaimerThe information and views presented here are prepared by Karvy Private Wealth(a division of Karvy Stock BrokingLimited) or other Karvy Group companies. The information contained herein is based on our analysis and uponsources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. Thismaterial is for personal information and we are not responsible for any loss incurred based upon it.The investments discussed or recommended here may not be suitable for all investors. Investors must make theirown investment decisions based on their specific investment objectives and financial position and using suchindependent advice, as they believe necessary. While acting upon any information or analysis mentioned here,investors may please note that neither Karvy nor any person connected with any associated companies of Karvyaccepts any liability arising from the use of this information and views mentioned here.The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time to time. Every employee of Karvy and its associated companies are required todisclose their individual stock holdings and details of trades, if any, that they undertake. The team renderingcorporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securitiestill such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. Allemployees are further restricted to place orders only through Karvy Stock Broking Ltd.The information given in this document on tax are for guidance only, and should not be construed as tax advice.Investors are advised to consult their respective tax advisers to understand the specific tax incidence applicable tothem. We also expect significant changes in the tax laws once the new Direct Tax Code is in force – this could changethe applicability and incidence of tax on investmentsKarvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indianregulations.Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at:702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 .(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills,Hyderabad 500 034)SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O):INF010770131,NCDEX(00236, NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBI Registration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”