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The world this week april 2 - april 6 2012


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The world this week april 2 - april 6 2012

  1. 1. The World This WeekApr 02 – Apr 06, 2012
  2. 2. Equity View:The Nifty moved up by 2.5% last week from the previous week’s closing. This was on the back of positive global marketsentiments and positive macro economic data. Car sales numbers for the month of March have continued to surprise on thepositive. thThis week is going to be data heavy as Infosys would declare it Q4 results on 13 April. Most of the major companies wouldannounce their results this week. Our own sense about the results is that the earnings of majority of companies havebottomed out in Q3 and that Q4 earnings should have a definite improvement. We are expecting a PAT growth of around 20%y-o-y basis in Q4, which would be a significant improvement in PAT growth which was witnessed at 12-13% y-o-y in Q3. thThe markets are looking forward to the Monetary Policy which will be announced on 17 April 2012. We expect a 25 basispoints repo cut to be announced in this policy review. We believe that both the quarterly results and monetary policy will actextremely crucial in determining the short-term direction in the market.Our own belief for FY 13 is that Indian equities will outperform on back of easing monetary cycle and a bounce back incorporate earnings and growth numbers. We are expecting a GDP growth of around 7-7.5% this year and an inflation rate ofaround 7% taking the total GDP growth in nominal terms to around 14-14.5% this should also equal to the normal earningsgrowth rate for most of the companies. We are expecting almost a 30% increase in Sensex from the current levels andexpecting 22,500 as our yearend target for Sensex by March 2013.News:DOMESTIC MACRO: The HSBC manufacturing Purchasing Managers Index (PMI), compiled by Markit, eased to 54.7 in March from 56.6 in February. In January, the PMI reading was 57.5. Indias exports grew an annual 4.3% to $24.6 billion in February, while imports rose 20.7% to $39.8 billion. The trade deficit widened to $15.2 billion during the month from $14.8 billion in January The Reserve Bank of India (RBI) has eased its overseas direct investment norms by waiving the need for Indian entities to seek its approval to open foreign currency accounts abroad.GLOBAL MACROEuro: Markits Eurozone Manufacturing Purchasing Managers Index (PMI) dropped to 47.7 last month from 49.0 in February, in line with a preliminary reading. It has now been below the 50 mark that divides growth from contraction since August. Spanish borrowing costs jumped at bond auctions on Wednesday, spreading the fear in European markets of a return of the euro zone debt crisis and overshadowing a successful step back into debt markets by neighboring Portugal. Spain sold €2.6 billion of debt, at the low end of its target range, with a bond maturing in 2020 yielding an average 5.338%, higher than a forecast 5.2% and up from 5.156% when it was last sold in September. A European bailout for Spain is not on the table and would be the worst possible outcome for the countrys debt troubles, Economy Minister Luis de Guindos said in an interview with state radio late on Thursday. Greece extended a deadline for a second time on Thursday for bondholders to accept a debt swap, giving Athens a little more breathing space to formulate a response to investors who have refused to sign up for the landmark deal.
  3. 3. US: The number of Americans lining up for new jobless benefits dropped to a seasonally adjusted 357,000 in last week, lowest level in nearly four years. President Barack Obama signed into law on Thursday a bipartisan bill to kickstart small business growth and he promised rigorous oversight to make sure the measure does not harm investors, as critics have warned. The bill will make it easier for small firms to raise capital and go public marked a rare accomplishment in an gridlocked Congress.China: The seasonally adjusted HSBC Services Purchasing Managers Index (PMI) stood at 53.3 in March, down slightly from Februarys 53.9, but signaling healthy growth with the new business sub-index extending an unbroken run of expansion to 40 months.
  4. 4. Satadru Mitra Varun Goel Jharna Agarwal Palak 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 upon sourcesthat we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is forpersonal 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 their owninvestment decisions based on their specific investment objectives and financial position and using such independentadvice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may pleasenote that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arisingfrom 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 to disclosetheir individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysisand investment recommendations are restricted in purchasing/selling of shares or other securities till such a time thisrecommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restrictedto 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. Investorsare advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We alsoexpect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicability andincidence 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-SEBIRegistration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”