China stocks tumble, suffer biggest one-day loss in eight years

Markets | Mon Jul 27, 2015 3:54am EDT

China stocks tumble, suffer biggest one-day loss in eight years

SHANGHAI | BY SAMUEL SHEN AND PETE SWEENEY

Chinese shares tumbled more than 8 percent on Monday amid renewed fears about the outlook for the world's No. 2 economy, reviving the specter of a full-blown market crash that prompted unprecedented government intervention earlier this month.

Major indexes suffered their largest one-day drop since 2007, shattering a period of relative calm in China's volatile stock markets since Beijing unleashed a barrage of support measures to arrest a slump that began in mid-June.

The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen plunged 8.6 percent, to 3,818.73, while the Shanghai Composite Index .SSEC lost 8.5 percent, to 3,725.56 points.

While the falls followed lackluster data on profit at Chinese industrial firms on Monday and a disappointing private factory sector survey on Friday, there was little to explain the scale of the sell-off.

Some analysts said fears that China may hold off from further loosening of monetary policy had contributed to souring investor sentiment.

"The recent rebound had been swift and strong, so there's need for a technical correction," said Yang Hai, strategist at Kaiyuan Securities.

He said the trigger was "a sluggish U.S. market amid stronger expectations of a Fed rate rise in the fourth quarter. That, coupled with China's rising pork prices, fuels concerns that China would refrain from loosening monetary policies further."

In late June and early July, Chinese authorities cut interest rates, suspended initial public offerings, relaxed margin-lending and collateral rules and enlisted brokerages to buy stocks, backed by central bank cash, to support share prices.

The battery of stabilization measures followed a peak-to-trough slump of more than 30 percent in China's benchmark indexes, which had more than doubled over the preceding year.

Chinese share markets had recovered around 15 percent since then, before Monday's renewed sell-off.

Stocks fell across the board on Monday, with 2,247 companies falling, leaving only 77 gainers.

Index heavyweights, including China Unicom (600050.SS), Bank of Communications (601328.SS) and PetroChina (600028.SS), slumped by their daily downward limit of 10 percent.

More than 1,500 shares listed in Shanghai and Shenzhen dived by the daily limit.

(Editing by Alex Richardson and Richard Borsuk)

NIFTY FUTURE MUST HOLD 8490 ; ELSE 8322, 8194 BEFORE EXPIRY

NIFTY FUTURE MUST HOLD 8490 ; 

ELSE 8322, 8194 

BEFORE EXPIRY

BANKNIFTY FUT HEADING TOWARDS 18400 

No invention, earth shaking idea from India in 60 years: NR Narayana Murthy

No invention, earth shaking idea from India in 60 years: NR Narayana Murthy 

BENGALURU: There has not been a single invention from India in the last 60 years that became a household name globally, nor any idea that led to "earth shaking" invention to "delight global citizens", IT czar N R Narayana Murthy said today.   

"Our youngsters have not done much impactful research work despite being equal to their counterparts in intellect and energy in Western universities," he said delivering the convocation address at the Indian Institute of Science here.

He said almost all inventions such as cars, electric bulb, radio, television, computers, Internet, wifi, MRI, laser, robots and many other gadgets and technology happened, "thanks to the research by Western Universities".  

He added: "On the other hand, let us pause and ask what the contributions of Indian institutions of higher learning, particularly IISc ans IITs, have been over the last sixty-plus years to make our society and the world a better place?  

"Is there one invention from India that has become a household name in the globe? Is there one technology that has transformed the productivity of global corporations? Is there one idea that has lead to an earth shaking invention to delight global citizens?"  




 

BENGALURU: There has not been a single invention from India in the last 60 years that became a household name globally, nor any idea that led to "earth shaking" invention to "delight global citizens", IT czar N R Narayana Murthy said today.

Read more at:
http://economictimes.indiatimes.com/articleshow/48085732.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

No invention, earth shaking idea from India in 60 years: NR Narayana Murthy

Read more at:
http://economictimes.indiatimes.com/articleshow/48085732.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Greece sends reform plan to EU promising new tax hikes

GREEK GOVERNMENT NEEDS 
3 LAKHS 80 THOUSANDS CRORES (INR)

The Greek government sent a package of reform proposals to its euro zone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote on Friday to endorse immediate actions.
In the latest proposals, Greece has asked for 53.5 billion euros ($59 billion) to help cover its debts until 2018, a review of primary surplus targets and "reprofiling" the country's long-term debt.
In turn, Athens bowed to demands to phase out tax breaks for its islands -- cash cows for the tourism industry -- and to hike taxes on shipping companies.
The chairman of Eurogroup finance ministers confirmed receiving the documents but will not comment until they have been assessed by experts from the European Commission, European Central Bank and International Monetary Fund. U.S. stock futures jumped 1 percent in early Asian trade on the announced measures.
Greek lawmakers will be asked on Friday to authorize the leftist government to negotiate a list of "prior actions" it would take before any fresh aid funds are disbursed, a key step to convince skeptical lenders of its serious intent.
Leftist Prime Minister Alexis Tsipras spent the day with his cabinet drafting a last-ditch package of measures on which Greece's survival in the euro zone hinges.
A further vote would be needed to turn them into law if euro zone leaders agree at a summit on Sunday that the proposals are a basis for starting negotiations on a three-year loan and releasing some bridging funds to keep Greece afloat.
In a sign of possible trouble ahead, the head of Tsipras's junior coalition ally -- which has threatened to pull the plug on the government if the island tax breaks were scrapped -- did not add his signature to the reform proposals. Neither did Energy Minister Panagiotis Lafazanis, who leads the far-left flank of the ruling Syriza party.
The latest offer also included defense spending cuts, a firm timetable for privatizing state assets such as Piraeus port and regional airports, hikes in VAT for hotels and restaurants and slashing a top-up payment for poorer pensioners.
Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks. Greece defaulted on an IMF loan repayment the following day and now faces a critical July 20 bond redemption to the ECB of 3.49 billion euros, which it cannot make without aid.
The country has had two bailouts worth 240 billion euros from the euro zone and the IMF since 2010, but its economy has shrunk by a quarter, unemployment is more than 25 percent and one in two young people is out of work.

NIFTY HEADING TOWARDS 8600

NIFTY HEADING TOWARDS 8600
NIFTY HEADING TOWARDS 8600
NIFTY HEADING TOWARDS 8600 

 

AS EXPECTED THROUGH CHARTS, NIFTY HEADING TOWARDS 8300 THIS EXPIRY

NIFTY HEADING TOWARDS 8300

BEST TIPS IN NIFTY OPTIONS, STOCK FUTURES, STOCK OPTIONS

NIFTY NIFTY NIFTY - bottom picks in BANKS, FINANCIAL SECTORS..............................

Consumer confidence yet to translate into consumption: HUL

The uncertain global economic environment, inflation and intense competition pose challenges, says firm

  

Sapna Agarwal 

Hindustan Unilever Ltd (HUL), the country’s largest consumer packaged goods company by sales, on Friday said while consumer confidence has increased, it has not translated into an improvement in market conditions for fast moving consumer goods (FMCG).

In its annual report for fiscal 2015, the maker of Dove, Lux, Kissan and Surfbrands said in the short term, the uncertain global economic environment, inflation and intense competition pose challenges, while in the medium-to-long term, secular trends based on rising incomes, aspirations and consumption levels are positive, and an opportunity for the FMCG sector.

India remains at the top in the Nielsen global consumer confidence index for the fourth quarter in a row as of March end. However, the confidence is yet to translate into consumption, said Nielsen.

Even falling prices have not led to consumers loosening their purse strings. Inflation has dropped sharply over the past 12 months from around 9% a year ago to sub-5% levels currently on the back of government measures such as muted minimum support price hikes, open market sales of cereals and steps to limit hoarding.

“Footfalls are still down when seen month-on-month. Improved consumer sentiments have yet not translated into spends. Consumers remain cautious,” said Amit Jatia, vice-chairman of Hardcastle Restaurants Pvt. Ltd, a joint venture partner of McDonald’s in India. “We have to be patient. When the economy will take off, we can’t say. The government has taken a lot of good steps.”

As such, despite lower inflation, price cuts and aggressive spending on advertising and promotions, HUL’s increase in volume growth was not spectacular in the March quarter.

The company sold 6% more by volume during the March quarter, compared with the 3% growth seen in the October-December period. Though higher in absolute terms, a low base effect is partly responsible for it and some analysts had pencilled in this level of growth in their estimates.

Moreover, a below-average monsoon this year can dent rural demand and further compound the stress in the FMCG sector.

“This year, we have seen unseasonal rains and even the forecast for the monsoon is not very promising. This will bring rural demand under pressure,” said Vivek Karve, chief financial officer at Marico Ltd.

Besides, inflation is firming up once again. Brent crude, a key raw material for the sector, had hit a low of $46.59 per barrel on 13 January 2015. Since then it has gained 47.48%. Food inflation will also be back if the “deficient” monsoon forecast plays out.

To tackle a slow-growth market, HUL has accelerated the pace of innovation in the past fiscal year. Innovations touching about 60% of the product portfolio were executed, the company said in its annual report.

It also came out with a slew of launches, including TRESemmé Split Remedy and Hair Spa Rejuvenation shampoos and Closeup Diamond Attraction, a premium whitening toothpaste. There were also a few launches targeting the male consumer—Axe Signature deodorant andPond’s Men Energy Charge face wash with coffee beans.

Given the tough macroeconomic environment, HUL has also been working on cost-savings programmes. During the fiscal year, it saved 5% in supply chain costs, which is driven by various cross-functional teams such as research and development, procurement, manufacturing and logistics.

The company continued to drive its rural penetration programme by creating a consumer contact programme aimed at accelerating the growth and adoption of small and emerging categories in villages.

Through the programme, it reached more than 2.5 million rural consumers and contacted 800,000 schoolchildren. This programme is now active in over 8,000 villages across the country, the company said.

HUL also changed its direct selling business model under Hindustan Unilever Network to an online ordering and fulfilment model as the year continued to prove to be extremely challenging for the entire direct selling industry. There is “ambiguity on acceptable norms for direct selling in India”, the company said by way of explanation for the change to online ordering.

HUL’s shares closed at Rs.829.85, up 0.89% on BSE even as the Sensex ended at 26,768.49 points, down 0.17% on Friday.