Sensex up 139 points,Capital goods, healthcare stocks major gainers.

Though RBI Governor D. Subbarao played safe keeping the CRR and repo rate unchanged, the stock market took the shock in its chin as it was more or less anticipated.

The Reserve Bank of India, in its mid-quarter monetary policy review, has kept the repo rate unchanged at 7.25 per cent and cash reserve ratio at 4 per cent. It has also left the reverse repo rate unchanged at 6.25 per cent.

At 1.25 p.m., the 30-share BSE index Sensex was up 82 points (0.43 per cent) at 19,259.93 and the 50-share NSE index Nifty was up 25.4 points (0.44 per cent) at 5,833.80.
On the BSE, capital goods and healthcare stocks were the major gainers and were up 1.07 per cent and 0.86 per cent, respectively, followed by consumer durables 0.84 per cent and auto 0.81 per cent.

On the other hand, metal and PSU stocks lost investors' support and were down by 0.16 per cent and 0.12 per cent, respectively.

Among 30-share Sensex, M&M, Sun Pharma, Bharti Airtel, HDFC and BHEL were the top five gainers, while the top five losers were Tata Motors, Hindalco, Sterlite, Dr Reddy's and TCS.

No change Policy....RBI keeps the rates unchanged.

Reserve Bank of India (RBI) keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0
per cent of their net demand and time liabilities; and
 keep the policy repo rate under the liquidity adjustment facility (LAF)  unchanged at 7.25 per cent.
 Consequently, the reverse repo rate under the LAF will remain unchanged at  6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.25 per cent.

Nifty slips 33 points down trading at 5775, Sensex losses 80 points.

Points considered in Policy:
Global economic activity has slowed and risks remain elevated, most recently on account of uncertainty over policies of systemic central banks. On the domestic front, macroeconomic conditions remain weak, hamstrung by infrastructure bottlenecks, supply constraints, lacklustre domestic demand and subdued investment sentiment. Inflation has moderated as projected. However, upside pressures on the way forward from the pass-through of rupee depreciation, recent increases in administered prices and persisting imbalances, especially relating to food, pose risks of second-round effects.

Global growth has been patchy and uneven. Among advanced economies (AEs), during Q1 of 2013, growth in US and Japan improved while that in the euro area contracted. Growth in most emerging and developing economies (EDEs) has been relatively resilient, although in some large emerging economies, sluggish external demand and stalled domestic investment are dragging down economic  activity. Inflation has been easing in the AEs due to weak demand conditions.
EDEs, however, present a mixed picture: inflation remains elevated in the BRICS except China. Commodity prices, other than the price of crude, have generally softened in recent months.

Eye on Mahindra & Mahindra

Shares of Mahindra Forgings Ltd and Mahindra Composites Ltd may continue to trade with positive momentum. The promoter-Mahindra Group-announced a share swap under which it will hand control of its domestic components business to the Spanish company. The Spanish company announced an open offer, which is at a premium to Friday’s closing price of the target companies.
Mahindra & Mahindra is an Indian automobile manufacturing corporation,It is one of the largest vehicle manufacturers  by production in India.

MNM trading at Rs.968, opens at Rs.961.20 up by 2.29% from Friday's closing Rs.947.45,
Mahforg trading at Rs.69.25 up by 3.66%  from Friday's closing Rs.66.85,
Mahincomp is locked under upper circuit of  Rs.34.45.

Central banks could hold sway over markets

Actions of two central banks could determine the direction of Indian stocks in the week ahead. While the Reserve Bank of India (RBI) decision on policy rates is likely to set the tone for domestic stocks this week, the outcome of the US Fed’s two-day meet ending Wednesday — which could give some clarity on its monetary policy outlook — could have wider implications on  global financial markets.

   Hopes of a policy-rate or repo rate-cut by RBI have diminished following the recent decline in the rupee against the dollar. So, if the Indian central bank keeps the repo rate (at which it lends to banks) intact, markets would not be disappointed, said fund managers.

 After RBI’s meeting, investors will closely watch the US Federal Open Market Committee meeting. If Fed chairman Ben Bernanke signals that the US central bank might cut down its bond buying programme known as Quantitative Easing 3 (QE3), it could weigh down sentiment in emerging market equities including India’s. The liquidity from QE3 has made its way to equity and bond markets worldwide.

       Investors, however, think RBI might cut the cash reserve ratio (CRR) — the minimum amount banks need to hold with the central bank, to ease liquidity.

“A CRR cut of 25 bps is what some quarters of the market are looking forward to,.“With the declining rupee situation, high current account deficit numbers, markets are not expecting a repo rate cut.”

Gold futures trade lower on global cues

Gold futures showed a negative trade on MCX as speculators offloaded their positions driven by weak trend in domestic market. Further, as investors sold off worrying about an early end to the Federal Reserve's massive bond-buying stimulus on the back of strong U.S. data, put pressure on the Gold futures. However, the prices found some support from weakness in the US dollar, as dollar-priced commodities became less expensive to investors holding other currencies.

The contract for August delivery was trading at Rs 27681.00/10 GRMS, down by 0.31% or Rs 85.00 from its previous closing of Rs 27766.00/10 GRMS. The open interest of the contract stood at 14347 lots

The contract for October delivery was trading at Rs 27868.00 /10 GRMS, down by 0.32% or Rs 89.00 from its previous closing of Rs 27957.00/10 GRMS. The open interest of the contract stood at 1344 lots on MCX.

Bond yields ease tracing lower than expected May inflation data

Pre WPI data Scenario:

Bond yields eased in early deals tracing a stronger rupee and higher US treasuries. However, yields will likely be biased up as the Reserve Bank of India is unlikely to cut rates as the recent sharp rupee fall has sparked renewed concern about the current account deficit. Meanwhile, the yields gyrated in range-bound for today’s trading session as dealers awaited headline inflation, which probably held near the central bank's comfort level of 5 per cent last month.

On the global front, US Treasuries were firm in Asia on Friday as traders took the view that any end to the Fed's bond buying programme will be gradual and that no rates hikes were imminent. Meanwhile, Brent futures slipped on Friday from near $105 a barrel with ample US inventories and a poor demand outlook weighing on prices, after bouncing more than 3 percent in the last two sessions off this week's low.

Back home, the yields on 10-year 7.16% - 2013 bonds were trading 1 basis point lower to 7.32% from its previous close of 7.33% on Thursday.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.00% from its previous close of 7.01% on Thursday.

Post WPI data Scenario:

In a sharp reaction to the surprisingly lower inflation figures for May, bond yields edged lower on enlarged rate cuts hopes. Lower industrial growth and inflation data, strengthens the case for rate cut in RBI’s monetary policy slated next week.

Providing RBI the much needed room for slashing rates, India's main inflation gauge, surprisingly slowed down further to 4.7% for the month of May, as compared to 4.89% (Provisional) for the previous month of April, which was its lowest level since 2009.

The yields on 10-year 7.16% - 2013 bonds were trading 1 basis point lower to 7.32% from its previous close of 7.33% on Thursday.

May WPI softens further to 4.7% v/s 4.89% in April; March inflation revised downwards to 5.65%

In a big surprise, the annual rate of inflation, based on monthly WPI, slowed down further to 4.70% (Provisional) for the month of May, 2013 (over May, 2012) as compared to 4.89% (Provisional) for the previous month and 7.55% during the corresponding month of the previous year. Build up inflation in the financial year so far, was 0.88% compared to a build-up of 1.80% in the corresponding period of the previous year. However in a pleasant surprise, March inflation figures were revised downward to 5.65% from 5.96%.

Manufactured products, which carry weight of 64.97% in the index, rose by 0.3% to 149.1 (Provisional) from 148.7 (Provisional) for the previous month. The index for 'Food Products' group rose by 0.8% to 167.1 (Provisional) from 165.8 (Provisional) for the previous month. The index of Fuel & Power, which has weight of 14.91%, declined by 1.3% to 192.0 (Provisional) from 194.6 (Provisional) for the previous month due to higher price of electricity (13%) as price of other items such as LPG (12%), coal (10%), aviation turbine fuel (6%) and petrol (5%) declined.

The index of Primary Articles, having weight of 20.12% too rose by 0.6% to 229.3 (Provisional) from 228.0 (Provisional) for the previous month. The index for 'Non-Food Articles' group declined by 0.6% to 208.5 (Provisional) from 209.7 (Provisional) for the previous month, while the index for 'Minerals' group declined by 2.4% to 346.5 (Provisional) from 355.0 (Provisional) for the previous month.

However, it remains to be noted the widening divergence between WPI and CPI remains the matter of concern. Annual rate of inflation, based on the consumer prices index (CPI), declining for third straight month grew above the expectation of sub 9% figure at 9.31% in May, as against 9.39% in April.

Meanwhile, the sharp downtick in March inflation figures, core wholesale price index, or inflation that excludes volatile food and fuel prices, which is estimated to have risen by 2.4% from a year earlier, easing from an annual 2.77% rise in April, also provides the central bank with some room to cut policy rates by 25 basis points in its Policy review on June 17. The Reserve Bank of India (RBI), so far, has obliged the street with rate cuts for three times, with the latest being the one on May 3. Drawing comfort from 3-year low inflation, RBI, in its ‘Monetary Policy Statement 2013-14’, reduced repo rate by 25 basis points from 7.5% to 7.25% with immediate effect, its lowest since May 2011.

CAD likely to remain at 4% in Q4 FY13: Raghuram Rajan

As per the Chief Economic Advisor Raghuram Rajan, the country’s Current Account Deficit (CAD) is likely to be around 4 percent of the gross domestic product (GDP) for the fourth quarter of FY13. The CAD, which represents the difference between the export and import of goods, services and transfers, widened to a record high of 6.7 percent in the third quarter of FY13 on the back of rising oil and gold imports and is expected to be around 5 percent for the previous financial year. Meanwhile, the high CAD is impacting the rupee value, which has hit 58.50/$ level recently.

   India’s gold imports touched 162 tonnes in May, while in April, it were around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Further, the recently released World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put in place regulations under which gold can only be imported on a consignment basis to meet the genuine demands of Jewellery exporters. It has also increased margin money to 100 Percent. 

TV18 Shines on launching a 24 hrs Television News channel 'News18 India' in UK

TV18 Broadcast India's Premier news and entertainment network has launched 'News18 India' a 24hrs television news channel is designed to give global audiences a window into the world's largest democracy.
News18 India will be distributed in the UK and other International markets bu Indiacast, a strategic joint venture bbetween TV18 and Viacom18 and one of India's largest  multi platform content aggregators,

Following the entry in the UK, News India will be launching across the globe including key diaspora markets such as the us,canada, middle east and Australia.
 The promoters holding in the company stood at 57.04% while institutions and non-institutions held 10.24% and 32.72%  
Last one week high and low stood at Rs.25.60 and Rs.24.05 respectively.the scrip is currently trading at Rs.24.65 up by 1.23% from yesterday's closing.

Mahindra Satyam gains on entering into strategic alliance agreement with CollabNet

Mahindra satyam, a leading global consulting and IT service provider, has entered into a strategic alliance agreement with collabNet, the leader for enterprises cloud development , to jointly develop and deliver Enterprise cloud development, Agile and DevOps solutions in the cloud services space. Mahindra satyam and Tech mahindra will work together with CollabNet under this agreement.
 
collabNet's Teamforge ALM platform aligns with Mahindra satyam and Tech mahindra's vision to drive value for enterprise IT organisations via cloud based approaches. Both the companies will resell collabNet's Teamforge and Cloudforge products and services, as well as its Agile training services throughout Asia.

   Satyam is currently trading at Rs.112.60 up by 0.76% fro its previous closing Rs.111.75 on the BSE.