Monday, Jul 11 - Morning brief for the stock market

Stocks To Watch: HCL Tech, Ranbaxy, Bharti airtel, Idea Cellular

Monday, Jul 11 - Morning brief for the stock market:

BIG PICTURE

* Income inequality between rural and urban consumers widened to 91% in the first five years of the United Progressive Alliance coming to power in 2004. (Mint, Sat)

* The Cabinet reshuffle, due today, has been postponed ostensibly as a train accident involving Kalka Mail has claimed over 35 lives. (var)

TOP EVENTS TODAY
* Apr-Jun earnings to be detailed by: Chemfab Alkalis, CMC, Essar Oil, Kavveri Telecom Products, Shanthi Gears, Sintex Industries.
* Annual General Meet of: ASM Technologies, Electrosteel Castings, Indo Asian Fusegear, MSL Industries, Muthoot Capital Services, and Shanthi Gears.

* Board Meetings of:

+ Bilcare to consider dividend.

+ Esaar India to consider 10-for-1 stock spilt.

+ Gujarat Pipavav Port to mull seeking new terms for 7.65-bln-rupee loan.

+ V & K Softech to consider pref issue of shares, warrants, other securities.

INDICATORS (previous session)

* NSE provisional net buy/(sale) in bln rupees, Jul 8: FII 5.17, DII (3.89)

* Institutional net buy/(sale) in bln rupees, Jul 7: FIIs 7.5, MF 1.72

* FII NSE futures net buy/(sale) in bln rupee, Jul 8: index (5.62), shr (6.99)

* Sensex 18858.04, down 220.26 points; Nifty 5660.65, down 68.30 points

* Crude: $96.20/bbl; Rupee: 44.32/$1; Gold: $x,xxx.xx/ounce; 10-yr yld: 8.3531%

WEEKLY SECTOR OUTLOOK

* AUTO: Subdued on weak sales outlook for 2011-12 (Apr-Mar).

* BANKS: To track the movement in the broad market.

* CAPITAL GOODS: May slip on profit booking after three-four weeks of gains.

* CEMENT: In band with negative bias due to weak demand and likely price cut.

* FMCG: Seen firm due to defensive buying.

* INFORMATION TECHNOLOGY: To eye INFOSYS, TATA CONSULTANCY SERVICES' earnings.

* OIL: Seen weak; RELIANCE INDUSTRIES in focus as Cabinet may take up BP deal.

* PHARMACEUTICAL: Likely to gain on defensive buying.

* STEEL: In band with weak bias due to draft mining bill, low demand for steel.

* TELECOMMUNICATIONS: Seen down due to profit booking.

OUTLOOK

* Domestic share indices are likely to open weak due to negative global cues following disappointing US jobs data and further profit booking as the market is in an "overbought zone".

GLOBAL STOCK MARKETS

* US: Stocks on Wall Street ended down Friday as rise in non-farm payrolls in June was way below expectation, and as unemployment rate in the US rose to 9.2% in June, the highest since December, from 9.1% in May.

* ASIA: Key Asian markets were trading down today as dismal US jobs data for June reported over the weekend hurt investor optimism about economic recovery.

SECTOR NEWS

* AGRICULTURE: Planning Commission, in the 12th Five-Year Plan, wants to create a pricing mechanism for water that makes farmers pay for the operation and maintenance of water delivery systems. (BS, Sat)

* AUTOMOBILE: Fiat has hired 53-year old Enrico Atanasio to turn around its Indian operations to beat rivals such as Volkswagen. (var)

Volkswagen India's plan to expand capacity at the Chakan plant in Maharashtra has hit a hurdle due to the recent change in the state's tax laws. (ET, Sat)

* AVIATION: Air India employees may have to take a wage cut as part of the carrier's turnaround plans. (ET, Sat)

Supreme Court has rejected Sahara group's plea for a notice to the government on a SEBI order to return with 15% interest the funds raised from investors under an optionally fully convertible debenture scheme. (BS, Sat)

Low-cost carriers can no longer refuse food to passengers if a flight is delayed by three hours or more. (ToI, Sat)

Tata group's Tata Industrial Services to focus on contractual project management in aerospace and defence sector. (FE)

* BANKING: Deutsche Bank investment banking head Anshu Jain may become co-chief executive officer along with a German speaking board member. (var)

Government asks public sector banks to hike lending to micro enterprises as many banks did not meet account-opening targets for the segment in 2010-11. (Mint, Sat)

Banks to hike tenure of education loans to 15 years from seven. (ToI, Sat)

C Rangarajan, chairman of the Prime Minister's economic advisory council, suggests giving bank licences first to non-corporates before allowing corporates to enter the field (ET)

* CORPORATE: Corporate affairs ministry blacklists 155,392 companies for violating norms. The firms will not be allowed to borrow from banks and financial institutions. (Mint, Sat)

Government plans to relax exit-norms for not-for-profit companies to allow them to de-register without having to follow cumbersome regulations. (BS)

After taking a decision on the outright sale of ailing SCOOTERS INDIA, government has proposed to follow a similar divestment process for HMT Bearings and Tyre Corp of India. (PTI)

* DEFENCE: US eyes investment of nearly $30 bln in India's defence sector over the next few years. (BS, Sat)

In the next few weeks, the Government may ease rules for large overseas defence contractors on sourcing components from domestic vendors. (Mint)

* EDUCATION: Department of Industrial Policy and Promotion recommends scrapping of three-year lock-in on foreign direct investment in the sector. (ET)

* ENERGY: Essar Energy has tied up a three-year secured revolving $1.5 bln working capital loan with six banks, and a $400-mln term credit with two other banks to fund the acquisition of Stanlow refinery from Royal Dutch Shell. (Mint, Sat)

* FERTILISER: Government allows fertiliser firms to set retail prices of phosphatic and potassic nutrients but asks them to keep rates at a "reasonable level". (ET, Sat)

Empowered Group of Ministers is expected to meet in next two weeks to finally approve the Nutrient Based Subsidy hpolicy for urea. (BS)

* FOREIGN EXCHANGE: Enforcement Directorate has slapped a 71-bln-rupee notice on Etisalat DB for violating the Foreign Exchange Management Act and given the company 15 days to respond. (var)

* GOVERNMENT: To seek review of Supreme Court's decision to set up a special investigation team to probe black money. (var)

* HOSPITALITY: Chennai-based Appu Hotels, which runs the Le Royal Meridian hotels in Tamil Nadu, plans to invest 2 bln rupees in two hotels in Sri Lanka and expects to sell shares by the second half of 2012 to raise 5-10 bln rupees for funding expansion. (Mint)

Several Indian budget and mid-segment hotels are scouting for private equity money to fuel growth and expansion. (Mint)

* INFORMATION TECHNOLOGY: US customers ask Indian information technology companies to cut rates by up to 15% (ET)

* MEDIA: Sun18 and MSM Discovery are in talks to jointly distribute channels. (Mint)

* MINING: Planning Commission Deputy Chairman Montek Singh Ahluwalia has said asking mining companies to share profits with the project-affected was not a good idea. (BS)

Posco has roped in two local firms for its proposed 323.66-bln-rupee, 6-mln-tn facility in Karnataka to ensure speedy clearances and uninterrupted iron ore supply. (var)

Australia has slapped a carbon tax of A$23 per tn of coal mined in the nation. (FC)

A group of ministers on the new Mines and Minerals (Development & Regulation) Bill, 2011, has also approved levy of 2.5% central cess and 10% state cess on amount of royalty paid by companies. (DNA)

* MONSOON: Rainfall in July so far has been about 27% below normal compared with 11% above normal in June.

* MUTUAL FUNDS: Mutual fund industry has approached the Securities and Exchange Board of India to allow entry into the pension product market in a bid to garner long-term funds. (var)

Employees Provident Fund Organisation's apex decision maker Central Board of Trustees will meet on Thursday to appoint new fund managers for managing its corpus of 3.5 trln rupees. (var)

* OIL: The Empowered Group of Ministers on fuel might meet Tuesday to mull direct transfer of kerosene subsidy to states, said a source. The EGoM might approve annual cap on the number of subsidised LPG cylinders per family.

* POWER: Steel, textiles, and cement mills are buying electricity directly

from power exchanges, particularly in Punjab and Tamil Nadu, to cut costs.

(ET, Sat)

French company Areva's Indian partners in the 9,900 MW nuclear power park in Jaitapur will contribute material and services worth 40-45% of the cost of the first two reactors. (Mint, Sat)

Central Electricity Regulatory Commission will review tariff determination norms for biomass power projects so developers can pass on the cost to consumers. (FE, Sat)

Cabinet will decide this month on subsidising interest on loans taken by state electricity boards to cut distribution losses. (Mint)

* RAILWAYS: Indian Railways to buy more wagons from the lowest bidder in 2011-12 to reduce cost of buying rolling stock. (FE, Sat)

* REAL ESTATE: Nomura Financial Advisory and Securities said Mumbai property sale registrations fell 30% on year to 4,272 in June, indicating the housing market in the city is slowing down.

Government is likely to introduce the Real Estate (Regulation and Development) Bill, 2011, in the monsoon session of the Parliament to promote planned development of real estate and protection of public interest. (PTI)

* RETAIL: The move to open multi-brand retail to foreign direct investment may run rough weather, with key Bharatiya Janata Party-ruled states and some constituent parties of the United Progressive Alliance rejecting or being ambivalent towardsthe proposed policy. (BS)

Mukesh Ambani, who brought in a new team of expats to head his retail business, in the second management shake up in almost a year, has given the new team three years to turn around the business. (FC)

* STEEL: Government bans import of low-grade electrical steel sheet, a critical component in power transformers. (ET, Sat)

* STOCK EXCHANGES: SEBI says it has executive powers to recognise and authorise stock exchanges, and MCX-SX cannot seek authorisation from the Bombay High Court. (var)

A new exchange for small and medium enterprises, a Bombay Stock Exchange initiative, will go live in September. (BS)

* TAXATION: The Mumbai income tax department's tax-deducted-at-source collection rose 27% on year to 150 bln rupees in Apr-Jun. (ET, Sat)

Third-party information related to high-value transactions in immovable properties will be one of the focus areas of the Income Tax Department for tracking tax evasion. (BS)

* TEA: Indian tea companies' plan to acquire tea estates in South Africa hit as the country scraps privatisation process and plans a new regulator. (ET)

* TELECOMMUNICATIONS: Lok Sabha Speaker Meira Kumar has indicated the document of the Public Accounters Committee on 2G spectrum allocation cannot be called a report. (ET, Sat)

Corporate Affairs Minister Murli Deora defends giving a clean chit to the Essar Group, saying the company's holding in Loop Telecom had been within permissible limits. (var)

After Swan Telecom and UNITECH, the Income Tax Department is looking into the tax implications of a deal between Datacom Soulutions and the Videocon group after the former was allotted 2G licences in 21 circles for 15.07 bln rupees in 2008. (var)

Supreme Court will today hear a public interest litigation based on a Comptroller and Auditor General of India report that players like BHARTI AIRTEL, Vodafone, and IDEA CELLULAR were major beneficiaries of the migration from a fixed-licence regime to that of revenue-sharing. (BS)

Telecom tower companies struggle with surplus capacity as new tenants fail to sign up and consolidation triggers wane. (FE)

STOCKS
* ANDHRA BANK: To hike Base Rate 25 basis points to 10.25% and Benchmark Prime Lending rate 25 bps to 14.50% from today.

* ASHOK LEYLAND: In pact with Krishnapatnam Port Co to supply 85 U-trucks.

* AURIONPRO SOLUTIONS: Has received Bombay High Court nod to merge E2E Infotech (India) and Kairoleaf Analytic with self

* BAJAJ AUTO: Is gearing up to cash in on the new trend with products suited to meet the requirements of the hinterlands. (PTI)

* BANAS FINANCE: To mull a 10-for-1 stock split on Friday.

* BHARAT HEAVY ELECTRICALS: Government invites bids from merchant bankers to advise on BHEL follow-on public offer.

* BHARTI AIRTEL: Arm Bharti Infratel plans initial public offer of at least $500 mln and may file regulatory papers in September or October. (DNA, Sat)

* BHUSHAN STEEL: To raise up to 45 bln rupees this year to fund capacity expansion plans and retire debt. (DNA, Sat)

* CINEMAX INDIA: Launches a four-screen multiplex in Pune.

* COAL INDIA: OIL AND NATURAL GAS CORP has taken over COAL INDIA in terms of market capitalisation. (var)

Mines secretary allays concerns that new norm on profit sharing with locals could hit company finances. (FE)

* COMPACT DISC INDIA: Sees 2011-12 net profit at 540 mln rupees and sales revenue at 3 bln rupees. Promoters say are committed to delisting the stock from exchanges.

* CORE PROJECTS & TECHNOLOGIES: Is in talks with SUPREME INDUSTRIES to buy out the latter's office property in Andheri, Mumbai, in a deal that could be worth 3.5 bln rupees. (BS)

* DECCAN CHRONICLE HOLDINGS: Has bought back 13.69 mln shares via open market operations for 900.3 mln rupees. (BS)

* ELDER PHARMACEUTICALS: Will not market Tiger Balm in India as the company has cut marketing ties with the brand's Singaporean owner Haw Par Healthcare. (var)

* GLOBAL OFFSHORE: To issue to promoters up to 440,000 shares on a preferential basis at 121 rupees a share and up to 469,700 warrants.

* GRANULES INDIA: Approves joint venture with SA Ajinomoto Omnichem.

* GUJARAT STATE PETRONET: Gets authorisation letter for three pipelines.

* HT MEDIA: Delhi High Court allows company to cancel planned restructuring.

* HCL TECHNOLOGIES: Has won a contract to provide application management services to home furnishings retailer IKEA.

* HOUSING DEVELOPMENT FINANCE CORP: Chairman Deepak Parekh says HDFC Life Insurance's initial public offer likely in two years. Parekh sees 2011-12 credit growth at around 20%.

* IDEA CELLULAR: US-based private equity firm Providence Equity Partners, which holds 9.99% stake in the company, is considering exiting from it. (BS)

* INDO ASIAN FUSEGEAR: Eon Electric, formerly known as INDO ASIAN FUSEGEAR, will buy back up to 6.45% equity via open market operations at not beyond 130 rupees per share. (FE)

* ITC: Has filed a suit against its one-time trading partner, the Chitalias, to recover assets that it says the two brothers have in India. (BS)

* JINDAL STEEL AND POWER: Plans $250 mln railway link between its Bolivian mine and proposed port. (ET)

* KARUTURI GLOBAL: To mull on Tuesday the opening date for issuing global depositary receipts.

* MAHANAGAR TELEPHONE NIGAM: Communications minister Sibal asks company to achieve 25% jump in revenue by Mar. (ET)

* MAHINDRA & MAHINDRA: The group's umbrella entity Mahindra Systech has been short-listed to buy Canada's Wescast Industries. (BS, Sat)

* MOREPEN LABORATORIES: Has got US Food and Drug Administration's nod to manufacture anti-allergy drug Desloratadine, the generic version of Clarinex, at its plant in Parwanoo, Himachal Pradesh.

* NALCO: To hive off non-aluminium businesses such as power and mining of other minerals into separate entities after they reach a critical size. (ET, Sat)
To infuse 17 bln rupees for a 49% stake in Kakrapar nuclear power plant in Gujarat. (var)

* NET 4 INDIA: To mull business restructuring on Friday.

* NITCO: Bombay High Court approves amalgamation of Particle Boards India with the company.

* ORISSA MINERAL DEVELOPMENT CO: Is in talks with Kudremukh Iron Ore Co, NMDC, and Manganese Ore India for contract mining of its iron ore reserves. (DNA, Sat)

* POWER GRID CORP OF INDIA: Plans to raise 50-70 bln rupees via a follow-on public offer, the process for which will start in 2013-14. (BS, Sat)

* PTC INDIA: May float two private equity funds as efforts to strengthen financial capabilities. (PTI)

* RANBAXY LABORATORIES: Is close to settling its pending issues with the US FDA for $300 mln-$400 mln. (ToI, Sat)

* RELIANCE COMMUNICATIONS: Telecom Minister Kapil Sibal denies favouring the company, saying the imposed penalty of over 50 mln rupees was in line with the company's agreement with Universal Service Obligation Fund. (var)

* RELIANCE INFRASTRUCTURE: Denies reports of plans to sell stake in its power transmission business, road and subway projects. (ET, Sat)

* RELIANCE POWER: Arm Coastal Andhra Power has stopped work on its Krishnapatnam Ultra Mega Power Project due to a hike in the cost of coal from Indonesia that the project is to run on. (BL, Sat)

* RELIANCE INDUSTRIES: Has said it is not being given enough time to respond to the audit observations on Krishna-Godavari D6 gas fields by the Comptroller and Auditor General of India. (var)

* SPANCO: Board approves increasing borrowing limit up to 35 bln rupees.

* STATE TRADING CORP OF INDIA: Has formed a consortium with seven other companies called SEALAC Agro Ventures to cultivate soybean and pulses in Uruguay and Paraguay (FC).

* TATA MOTORS: Plans to set up an assembly plant in South Africa. (DNA, Sat)
To use its commercial vehicle network to stock and sell select passenger vehicles, particularly in smaller towns and cities not covered by passenger vehicle dealerships. (ToI, Sat)

Supreme Court rejects company's plea against levy of non-agricultural cess on its Pune plant by local authorities. (ET)

* TILAK FINANCE: To mull a 10-for-1 stock split on Friday.

* UNION BANK OF INDIA: Pays 2.39 bln rupees dividend to the government for 2010-11.

* WPIL: Singaporean arm buys 100% stake in Mathers Foundry.

* YES BANK: Targets 40-50 bln rupees in education sector loans by 2015.