FB CLOSES USD 19 bn WhatsApp DEAL

Facebook today completed its USD 19 billion buy of mobile messaging application WhatsApp, appointing one of the startup's co-founders to the social network's board as part of the deal. "We are looking forward to connecting even more people around the world, and continuing to create value for the people who use WhatsApp," Facebook said in a statement emailed to AFP. Along with joining the Facebook board of directors, Jan Koum will remain chief of WhatsApp. Koum's salary will be a dollar a year, according to a filing Monday with the US Securities and Exchange Commission. The symbolic annual pay mirrors that of Facebook chief Mark Zuckerberg. WhatsApp co-founder Brian Acton will remain with the company under terms of the acquisition, which promises "inducement grants" of millions of shares of stock that will incrementally vest during the coming four years for Koum and Acton if they remain with the company, according to Facebook. European Union regulators on Friday cleared the buyout of the WhatsApp mobile messaging service by Facebook, despite opposition by telecom companies afraid of the growing power of US technology giants. In a statement explaining its approval of the USD 19 billon deal (Rs.1,14,000 crore), the European Commission, the EU's executive arm, said Facebook and WhatsApp were "not close competitors" and that consumers would continue to have a "wide array of choices". "We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market," EU Competition Commissioner Joaquin Almunia said in a statement. Facebook, the world's biggest social network, announced the buyout of the WhatsApp messenger service, used by 600 million people, in February and US authorities approved the deal in April.

INVESTORS WEALTH ZOOMS OVER Rs.23 lakh CRORES

Stock market investors have become richer by over Rs 23.33 lakh crore so far this year, as 25.49 per cent rally in the benchmark Sensex has helped the total valuation of all the BSE listed firms reach close to Rs 94 lakh crore.
In contrast, investors' wealth had surged by over Rs 1 lakh crore to Rs 70,44,431 crore in 2013.
At present, the total market capitalisation (m-cap) of BSE listed companies stands at Rs 93,77,672 crore, about Rs 6.22 lakh short of the Rs 100 lakh crore milestone.
The Sensex has gained 25.49 per cent from December 31 to October 1 and touched its life-time high of 27,319.85 on September 8.
Positive investor sentiment following the formation of new government at the Centre and strong foreign fund inflows have been driving the domestic equity markets, experts said.
"The undercurrent of the stock market is bullish although stocks are currently in the consolidation phase and buying may resume in the days to come," said an equities expert.
Marketmen have maintained that the surge in investor wealth is also due to continued rise in listed firms. The total number of listed companies stands at 5,485.
Sensex blue-chip companies whose market valuation is more than Rs 1 lakh crore include TCS, ONGC, RIL, ITC, Infosys, Coal India, HDFC Bank, SBI, Sun Pharma, ICICI Bank, HDFC, Bharti Airtel, HUL, Wipro, Tata Motors, L&T and NTPC.
Outsourcing giant TCS is the most valued Indian company with a market cap of Rs 5,43,684.13 crore.
Indian markets have seen smart gains this year helped by robust foreign fund inflows.
Since the beginning of this year, foreign investors have infused a net of Rs 83,438 crore (USD 14 billion) in the stock markets, while they have invested a net of Rs 1.18 lakh crore into the debt market (USD 19.6 billion).

9.87 LAKH COMPANIES ACTIVE IN INDIA

India might have more than 14 lakh registered companies but only about 9.87 lakh entities were active at the end of August, according to official data. Out of the total registered companies, nearly 2.60 lakh have been closed down while thousands of entities are in the process of winding up. Corporates are registered under the Companies Act, which is implemented by the Corporate Affairs Ministry.
Latest data from the Ministry show that there were about 9.87 lakh active companies as on August 31 and the figure includes 1.27 lakh firms which were incorporated within the last one-and-a-half years.
"As on August 31, 2014, the number of companies registered under the Companies Act was 14.16 lakhs. Of these, 2.59 lakh companies were closed and 27,218 companies are in the process of being closed," as per the Ministry's latest monthly newsletter. Besides, around 1.42 lakh companies were classified as 'dormant' -- those which have not filed their annual statutory filings for more than three consecutive years.
Meanwhile, a total of 6,676 new companies were registered in August and their authorised capital stood at Rs 1,006 crore. "Under the category of companies registered as limited by shares, Delhi had maximum number of registrations (1,250) followed by Maharashtra (1,199) and Uttar Pradesh (514). "Economic activity-wise maximum number of companies (2,878) were registered under Business Services (IT and R&D)," the Ministry said.

OIL FALLS BELOW $90

Crude prices slipped today to multi-year lows owing to a build-up in supplies while the dollar rallied in response to a strong US jobs report, as analysts warned of further losses. US benchmark West Texas Intermediate for November delivery was down five cents at USD 89.69. On Friday it closed below USD 90 for the first time since April 2013. Brent North Sea crude eased 36 cents to USD 91.95, a two-year low. While output surges in the United States owing to oil shale extraction, exports are on the rise in Russia, Libya and Kurdistan. Also, Saudi Arabia cut prices for the fourth straight month last week to defend its market share, suggesting it is unlikely to cut production any time soon. Both Brent and New York contracts have shed about 15 per cent in the past three months. "Oil prices are likely to keep falling for the rest of the year as global supply is outstripping demand," said Tony Nunan, oil risk manager at Mitsubishi Corp. in Tokyo. "Supply of US shale gas alone can cover global demand this year, and unless OPEC countries reduce their production, or unless a fresh geopolitical concern occurs, the best estimate now is a bearish market," he added. Also depressing prices is the stronger dollar, which surged Friday after the Labor Department said the US economy created 248,000 jobs in September and the jobless rate dipped to a six-year low of 5.9 per cent. The news increased the likelihood the Federal Reserve will hike interest rates sooner than later. The greenback is sitting at six-year highs against the yen and two-year highs against the euro. A stronger greenback makes dollar-priced commodities more expensive for buyers using weaker currencies, which tends to dent demand and push prices lower.

ASTRO TECHNICAL GUIDE FOR NIFTY

for Next Week :: (07.10.2014 to 10.10.2014) …  

First Half (Tues &Wed) Range….  Monthly Astro Range….!!!

Planetary Position ::  During the current week Moon would be transiting  from Poorvabhadra in Pisces ti Bharani in Aries.

Sun transits in Hastha  in Virgo .

Mercury transits  in Swathi   in  Libra and in retro motion till 25^th October.

Venus transits in Hastha in  Virgo.

Mars  transits in   Jyeshta constellation in Scorpio .  

Saturn transits in Visakha constellation in Libra and in Taurus and Gemini Navamsa .  

Jupiter transits in Aslesha constellation in Cancer and in Capricorn and Aquarius navamsa ..

Nifty’s range between Tuesday and Wednesday would be the monthly astro range for the next Three weeks. Nifty would be bullish above the high and bearish below the Low for the next Three weeks.

While Sun’s ongoing conjunction with Venus is likely to depress values in general, Sun’s sextile aspect with Mars and Jupiter could benefit Public Sector  undertakings.  

 NIFTY :: 7946 (-13) (Nifty Bullishn only above 8050….)

Nifty traded in a narrow range in a truncated week and fell marginally and completed its Second week of fall. After the closing of our market on Wednesday, global market (Dow etc., ) experienced a roller coaster ride and holidays for our market have averted such a move.  We will have another truncated week next week with the week beginning on Tuesday. As movements in September month were generally narrow, October month could see a wider range considering the events such as State elections and Q2 results in addition to key events such as Diesel deregulation etc., Public Sector Banks, Infra and Realty sectors are quite weak and the sentiment would not improve unless these sectors rebound. Financials are quite important as they constitute significant portion of Nifty. Value investors with a medium / long term horizon can consider well run banks with lower incidence of NPAs. It is time for this Government to do something concrete on economic front particularly issues such as Gas pricing which would impact other sectors too.

Nifty moved in a narrow range during September and  appears to have taken support once again close to 50 DMA. 50 DMA is placed around 7900 and Nifty had taken support around 50DMA on previous Four occasions and it is to be seen whether it would do it this time too. If Nifty closes below 50 DMA for Two weeks, it could trigger a bigger correction. Further,  Nifty needs to clearly trade above 8050 to negate the present fall / down move.

If Nifty is to remain bullish for October, it needs to take support above 7800, failing which a deeper correction is possible.

Highly positive macro indicator is the falling crude oil prices and falling gold imports which would positively impact Current Account Deficit.

PSU Banks need to come out of the NPA problem which could take further time in view of the gravity of the problem. Recent Supreme Court verdict on Coal allocation has increased the woes of PSU Banks.  IT Sector is buoyant and further buoyancy too can be expected in view of strengthening US  economy. Infra and Power sector woes can be expected to be addressed by the present Government

Macro  economic indicators have turned positive in view of the falling

crude oil prices and the heartening feature is that Oil marketing companies are making profit on diesel sale too. RBI has indicated a rate cut only if Inflation comes under control. Hence, ff inflation eases leading to reduction of interest  rates, economic revival would kick in leading to earnings growth and higher PE too. With a proactive and  committed Government at the centre, it would happen sooner than later. However, a reasonable correction  could take place before another leg of upmove. On the other hand, if market remains sideways for a considerable period also, it could be  taken as a correction. Stocks which have run up ahead of fundamentals are seen correcting. Most PSU stocks and Infra stocks corrected sharply during the last Two months. 

Technically, Nifty is bullish in  most time frames and very short term trend would become positive when it closes above 8050.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8045, 7905, 7700 and 7035 respectively and would

act as supports / resistances. Nifty has taken support from about 50 DMA last Four times and could be expected to lend strong support and a deeper correction could set in only if it closes and trades  below 50 DMA(7905) consistently (for more than a week).

Based on the present Government’s agenda, Infra  and Power sectors could come out of their problems

soon . Stocks of promoters with proven record may be preferred in these sectors.

Investors need to accumulate quality stocks while traders need to be ever vigilant

Nifty continues to be above 200 DMA and 50 DMA too is above 200 DMA (Golden Cross) suggesting that the long term bullish trend is intact.   Nifty is quoting at a PE of under 21, which is about 18% above the long term PE multiple.  Hence, further upside (  8500+ is possible during the year / before next Budget)  

in view of the  stable and performing Government  at the centre as earnings would go up because of favourable atmosphere .  IF Nifty stays around the present level for the next Six months, trailing PE could come down to less than 20 also making a case for another upmove.

Market is usually ahead of fundamentals and fundamentals need to catch up with the present valuations which could take some time .

.

Further, Nifty had been trading in a range of 4600 to 6300 (till 2013) for more than 4 years and  a  powerful breakout had taken place  for an initial target of about 8200 / 8500.. Hence strong long term support would be around 7050 level and Medium term support is 7700.

For Bank Nifty, strong Resistance exists around 15900 / 16000. If unable to pierce these levels, it could seek lower levels.

IT Index came out of the narrow range and is trading nearer to the resistance point of 11550. Caution is advised at higher levels as a reasonable pullback appears due.

Technical Levels ::

For the coming week, Nifty spot is expected to face

resistance at 8035,  8125, 8215 and find support at 7855, 7765, 7680.

Minor resistances may be found at 8000, 8040, 8065, 8105  and minor supports at 7890, 7850, 7825 and 7785.

For short term Nifty is bearish  with strong support at 7800 and would become bullish on a close above 8050 

Advice for Traders ::

Nifty traded in a narrow range as there were only Three trading sessions during the week. October month , in general, could be a wide range month in view of State election results and Q2 results. Further, range expansion is natural after contraction. Nifty is weak as long as it does not close above 8050. If 7800 is decisively breached, further downside is possible. Scrip / sector  specific is most likely.  Sell on rise with 8050 as stop loss on close basis and Buy on Decline with 7800 as stop loss on (close basis)., Generally, Nifty could rebound after Three weeks’ of fall. Hence, if Nifty falls during the current week, it could rebound later during the month.

2014... A MILD METEOROLOGICAL DROUGHT

With the country receiving "below normal" rainfall, a private weather forecasting agency has termed monsoon 2014 as a "mild meteorological drought" but the MeT department dismissed it saying around 70 per cent of the country had normal rains. "Monsoon 2014 has ended in a mild meteorological drought. In particular, Himachal Pradesh, Punjab, Haryana, Chandigarh, Delhi, Uttarakhand, east and west Uttar Pradesh, east Madhya Pradesh, Telangana, Rayalaseema, Marathwada, Nagaland, Manipur, Mizoram and Tripura finished the season with deficit (lower than normal by 20 per cent or more) rainfall. "Only Odisha, south interior Karnataka, and Jammu & Kashmir ended up with a positive departure of rainfall," Skymet said. However, MET department has refused to call it a "drought" despite the country receiving 12 per cent less rainfall than the normal precipitation. The country received 77.8 cm rainfall as compared to the normal rainfall of 89 cm. The official period for the Southwest Monsoon season in India is between June 1 and September 30. Skymet said that only one sub-division, south interior Karnataka, received excess rainfall, of 21 per cent, while about 30 per cent of the country received deficient rainfall. Skymet's Vice President G P Sharma said anything more than 10 per cent of deficiency is termed as a drought. "There are three different types of droughts - hydrological, meteorological and agricultural. This can be termed as a moderate meteorological drought," Sharma said. The government, however, sought to differ. "Declaring drought is not our mandate. We only collect the data and the job of declaring a drought lies with the Ministry of Agriculture and the state government. "The country has received 88 per cent rainfall and it is only few pockets that have received less rainfall," said Shailesh Nayak, Secretary, Ministry of Earth Science. "Around 70 per cent of the country has received normal rainfall and only 30 per cent received deficient monsoon. Many subdivisions have received less rainfall, but that does not mean the entire country is facing the same problem. So it would not be right to call it a drought year. We monitor rainfall declare rainfall deficiency," IMD Director General Laxman Singh Rathore said.

OMC LOSS IN 5 YEARS IS Rs.28,680 CRORES

With CAG castigating state-owned fuel retailers for overcharging customers by Rs 26,626 crore over 5 years, Oil Ministry has defended the PSUs saying they had absorbed Rs 28,680 crore in losses on fuel sales during that period.
The Comptroller and Auditor General of India in its latest report stated that Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp overcharged customers by Rs 26,626 crore from 2007-08 to 2011-12 by charging notional levies like customs duty on fuel they sold.
In comments on CAG observation, the ministry defended the pricing methodology followed by the oil marketing companies (OMCs) of calculating the desired retail price in a manner as if the product was imported - adding customs duty, freight, insurance, ocean loss and wharfage charge to prevailing international price of petrol, diesel, LPG or kerosene.
This they do because they import nearly 80 per cent of their raw material (crude oil) need and pay import parity price for the oil they buy from domestic producers, official sources said.
The retail price for diesel, LPG and kerosene has always been lower than cost and the difference has been met through subsidy support.
"As against the stated benefit of Rs 26,626 crore, OMCs were asked to bear the under-recoveries amounting to Rs 28,680 crore during the same period from 2007-12. Hence, no undue benefit was available to OMCs in the existing pricing mechanism," a source said.
Refining is a cyclical industry characterised by very volatile prices. Providing some level of protection and thereby adequate refining margins is necessary for encouraging investment in expansion, and more importantly in modernisation of domestic refineries. Failure on this front can impede our quest for energy security.
Also, the profit margins of OMCs are only around 1 per cent of their total turnover which are the lowest as compared to the global peers -- 10 per cent of Exxon Mobil, 11.2 per cent of Chevron and 7.6 per cent of Brazil's Petrobras.
Similarly, as compared to the profit margin of their PSU peers in energy sector -- NTPC (17.5 per cent), Coal India (21.9 per cent) and ONGC (26.5% per cent), the profit margin of OMCs are negligible, they said.
Sources said during 2007-08, 2008-09 studies were conducted by the Cost Accounts Branch of Department of Expenditure, in Ministry of Finance to work out the amount of under-recoveries of the OMCs under the current methodology and actual refinery cost method.
Similar study was also conducted for the period April- September 2010 and 2011-12. Only small differences were observed in the under-recovery amount worked out kinder both the mechanisms, they said.
Currently, there is no customs duty on crude oil while a 2.5 per cent import duty is charged on inward shipment of petrol and diesel. During post part of the audit period, crude oil attracted a 5 per cent customs duty, while a 7.5 per cent import duty was levied on products.

LIC GETS Rs. 11,500 CRORES AS I-T REFUND

Life Insurance Corporation (LIC) has received more than Rs 11,500 crore in income tax refunds and a big chunk of the amount would be passed on to policyholders, an official said. "We received I-T refunds in two tranches aggregating to more than Rs 11,500 crore, after winning a dispute with the I-T department at the Income Tax Appellate Tribunal (ITAT)," an LIC official, who wished not to be named, told PTI here today, adding that this refund happens to be the largest which the company has received so far. This could not be ascertained with LIC Chairman S K Roy. A text message sent to him also remained unanswered. In its order dated April 3, 2013, ITAT Mumbai had delivered a judgement in favour of LIC with respect to assessment years 2007-08, 2008-09 and 2009-10, the official said. As a result of the above ITAT judgement, the LIC received a refund of Rs 4,190.19 crore for assessment years (AY) 2007-08 and 2009-10 on December 31, 2013. A refund for AY 2008-09 worth Rs 7,500 crore has been received by the LIC recently, the official said. As per Section 26 of the LIC Act of 1956, 95 per cent of the surplus coming from I-T refunds ought to go to its policyholders, while the remaining 5 per cent has to be paid to the government in the form of dividend, after arriving at actuarial valuation at the close of the current fiscal year, the LIC official said. LIC has paid advance income tax for the financial year 2013-14 (AY2014-15) to the tune of Rs 5,118.92 crore, as against Rs 4,323.99 crore in 2012-13 (AY2013-14). LIC's service tax obligations for FY14 was Rs 4,022.40 crore (provisional) as against Rs 3,682.58 crore in FY13, he said.

NIFTY OUTLOOK FOR 7 & REVIEW

FORENOON BETTER

Nifty                               7946  -19

Nifty traded in a narrow range and closed with minor decline. All sectoral indices barring IT closed in the red. Market appeared to be lackluster because of long weekend. Strong support for October is at 7800 and real weakness would set in only when it closes below 7800 for more than Two sessions.  Nifty spot is expected to encounter resistance at 7995,, 8030 and find support at 7905, 7870 for Tuesday. While Global cues  and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to trade in a zigzag manner with better forenoon session and possible profit booking in the closing session. 

MARKET FELL ON PROFIT BOOKING

In lacklustre trade today, the BSE benchmark Sensex today closed 62 points lower as investors booked profit ahead of long week-end amid reports that India's manufacturing sector in September expanded at the slowest pace in nine months. The 30-share barometer resumed better and immediately touched a high of 26,683.70 before falling back to settle 26,567.99, exhibiting a fall of 62.52 points or 0.23 per cent.
The broader 50-issue Nifty of the NSE also declined by 19.25 points or 0.24 per cent to 7,945.55.
Brokers said sentiment was hit by reports of slowdown in the manufacturing sector. According to an HSBC survey, the headline HSBC India Purchasing Managers' Index (PMI) -- a composite gauge designed to give a single-figure snapshot of manufacturing business conditions -- dropped from 52.4 in August to 51.0 in September, the slowest pace of growth since December, 2013.
Selling was seen across-the-board as 10 out of 12 sectoral indices closed in the red and only IT and teck indices finished in the green.
Shares of IT companies firmed up after Infosys announced that it is extending its relationship with Oracle to enhance support for a range of innovative solutions and services on new technology platforms. IT stocks also got a boost from rupee falling to almost seven-month low of 61.94 against the dollar.
Infosys was the second top gainer in the Sensex pack with a gain of 2.66 per cent. Wipro was biggest gainer 3.22 per cent. TCS rose by 1.37 per cent. The BSE-IT index was the top gainer among sectoral indices with a rise of 1.94 per cent, followed by BSE-Teck 1.36 per cent.
Major losers were Maruti 3.11 per cent, Tata Power 2.47 per cent, Tata Steel 2.31 per cent, Gail India 2.27 per cent, Reliance Ind 1.96 per cent, ITC 1.81 per cent, ONGC 1.58 per cent, HUL 1.44 per cent and Hindalco 1.05 per cent. Gainers included Hero MotoCorp 1.24 per cent, Axis bank 0.81 per cent and Coal India 0.79 per cent.
THe BSE and NSE will now open for trading on Tuesday as a series of holiday fall on October 2, 3 and 6 on account of Mahatma Gandhi Jayanthi, Dussehra and Bakri Id.

 

PROFIT ON DIESEL RISE TO Rs. 2

Profit on sale of diesel swelled to Rs 1.90 per litre as oil ministry awaits return of Prime Minister Narendra Modi to cut rates.
With international oil prices continuing to slide, the over-recovery or profit on diesel sales, which was 35 paise in the second half of September, climbed to Rs 1.90 a litre, an official statement said here.
Over-recovery or profit should have in natural course translated into a price reduction to bring retail selling price at par with cost. But the oil ministry decided to wait and watch last month.
Now, with the profit rising further, it wants to reduce rates and pass on the benefit to consumers but is unsure of its mandate.
Sources said the ministry is of the opinion that it does not have a clear mandate to reduce rates post the January 2013 decision of the Cabinet to hike prices by 40-50 paise a litre every month.
Diesel prices have not been deregulated or freed yet and so rates cannot be reduced.
Petrol on the other hand, had been deregulated in June 2010 and rates have since then moved every fortnight in tandem with the cost. Petrol rates were yesterday cut by 54 paise in line with international trend. Sources said Oil Minister Dharmendra Pradhan has already written to Modi on the emerging scenario. Also, the ministry has written to the Election Commission seeking their concurrence for the price decrease in view of state assembly elections in Maharashtra and Haryana.
A decision will be taken after Modi's return, they said.
Softening international oil rates have meant that diesel under-recovery or the difference between retail price and its imported cost was wiped out and there was an over-recovery of 35 paise a litre from September 16. This over-recovery is now Rs 1.90 a litre.
But under-recoveries continue on kerosene and LPG.
"In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the 1st fortnight of October 2014 will be Rs 31.22 per litre (Rs 32.67 per litre in last fortnight) and Rs 404.64 per cylinder (Rs 427.82 per cylinder in last fortnight) respectively," the statement said.
State-owned fuel retailers - IOC, BPCL and HPCL are losing about Rs 156 crore a day on sale of PDS kerosene and domestic LPG. This is lower than Rs 190 crore daily under-recoveries during previous fortnight, it said. Sources said the Oil Ministry is of the view that while the Cabinet Committee on Political Affairs (CCPA) on January 17, 2013, allowed a monthly increase in diesel price of 40-50 paise per month to wipe out the under-recovery, it wasn't envisaged that there would be over-recovery. It wants to reduce diesel price to protect state-owned oil companies' market share, which may be lost to private retailers who would be selling diesel in tandem with international prices.