India

The Indian stock markets had a positive outing on the bourses today, having started the day well in the green. After opening in the green, markets moved higher in the mid-morning session. However, they started converging towards the dotted line towards the last two hours of trade. Towards the final hour of trade there was some volatility seen in the indices, however they managed to hold their heads above water and close the day in the green. While the BSE-Sensex closed higher by around 40 points (up 0.25%), the NSE-Nifty closed higher by around 12 points (0.25%). The smaller indices also had a lackluster day on the bourses. BSE Mid cap index closed flat. The BSE Small cap, however closed the day 0.1% higher. FMCG stocks were the top gainers by a fair margin, followed by realty. Consumer goods and consumer durables stocks however closed weak.

As regards global markets,

Indices in the Indian stock markets made absolutely no attempt to march towards the break even line during the closing stages and as a consequence, closed significantly lower today. BSE-Sensex edged lower by around 300 points (down 1.8%) while NSE-Nifty declined by about 85 points. BSE Mid cap and BSE Small cap indices didn't suffer as badly and lost in the region of 1% each. Almost all the stocks on the Sensex closed lower today.

All major Asian indices closed lower today with Europe too trading in the negative currently. The rupee was trading at Rs 54.4 to the dollar at the time of writing.

The flight to safety approach of foreign investors

Infosys' (INFY) share price has dropped more than 20% since April 13, following the reduced 2013 revenue growth forecast of 8%-10%. Some might wonder if Infosys looks cheap at the current price of $43-45. My discounted cash flow model suggests a fair value range of $45-50. Given so, the current discount does not provide enough margin of safety.

Infosys has benefited from the typical outsourcing business model.

It brings in revenue from US and Europe and provides the service in India to bank on the low labor cost of highly educated Indian labor force. This model allowed it to keep its operating margin around 28%-30% for the past 10 years. On the demand side, companies become more thrift about IT spending during the economy downturn. Rather than building operations in-house, they tend to outsource more. As a result, it has expanded greatly since 2008. According to its annual report, its

The Indian stock markets had a positive outing on the bourses today. After opening at par, markets remained in the positive zone for a bulk of today's session. They continued to trade in a similar range for the entire session. While the BSE-Sensex closed higher by around 112 points (up 0.7%), the NSE-Nifty closed higher by around 35 points (0.7%). The smaller indices also had a positive day on the bourses.

BSE Mid cap index closed 0.6% higher. The BSE Small cap, however, closed the day 0.3% higher. On the back of L&T's robust financial performance in 4QFY12, consumer goods stocks were the biggest gainers by a fair margin.

Metal and IT stocks also saw strong gains. FMCG stocks had a negative day on the bourses with blue chips trading in the red. Consumer durables stocks closed flat.

As regards global markets, major Asian indices had a mixed outing today.

India's HDFC Bank (NYSE: HDB) reported strong first-quarter earnings growth of 30 percent year over year. Fee growth also picked up by 25 percent YoY. Loan growth was a little lower at 21 percent YoY, because of the slowdown and uncertainty in the Indian economy. That said, retail loans increased by 55 percent, indicating stronger than expected consumer demand.

Franchise build-up continues at a healthy pace, with new branches increasing by 28 percent YoY to 2,544. Over the past four years, HDFC

The Indian stock markets had a weak outing on the bourses today post the higher inflation numbers which were announced. This spooked investors, especially those in banking stocks as the RBI may have little room to cut rates further. After opening in the green, markets remained in the positive zone for a bulk of the morning session. However towards noon, the indices trended moved lower and finally closed below par. However they came off the day's lows. While the BSE-Sensex closed lower by around 77 points (down 0.5%), the NSE-Nifty closed lower by around 21 points (0.4%). The smaller indices had a worse day on the bourses however. BSE Mid cap index closed 1% lower. The BSE Small cap, however closed the day 1.3% lower. Healthcare and IT stocks were the biggest index gainers. Oil and gas and banking had a negative day on the bourses with blue chips trading

India ETF fund products declined for the week with the largest two ETFs, EPI and PIN, down 3% and 2.1% respectively. However, it was another great week to invest in INDZ, the Direxion Daily India Bear 3X shares ETF. This leveraged and highly volatile India ETF fund fed off the market losses and finished the week with a 6% gain. In fact over the last month INDZ has racked up gains of 23% as the average non leveraged India ETF fund fell around 10% during that time period.

The best India ETF fund in 2012 continues to be the small cap India ETF, SCIF, from Market Vectors. It has gained over 15% in 2012, leading all other India ETF funds by close to 4%. This ETF is a great example of the ups and downs Indian markets have had this year. Take a look at the one year to date

Dr. Reddy's Laboratories (RDY)

Q4 2012 Earnings Call

May 11, 2012 9:00 am ET

Executives

Kedar Upadhye - Former Director

Gunupati Venkateswara Prasad - Executive Vice Chairman, Chief Executive Officer, Member of Management Council, Chairman of Investment Committee, Member of Strategy Committee, Member of Shareholders Grievance Committee and Member of Management Committee

Umang Vohra - Chief Financial Officer, Executive Vice President and Member of Management Council

Kallam Satish Reddy - Managing Director, Chief Operating Officer, Executive Director, Member of the Management Council, Chairman of Management Committee, Member of Shareholders Grievance Committee, Member of Investment Committee and Member of Strategy Committee

Analysts

Anubhav Aggarwal - Crédit Suisse AG, Research Division

Bhavin Shah - Dolat Investments Ltd., Research Division

Girish Bakhru - HSBC, Research Division

Prakash Agarwal - RBS Research

Sameer Baisiwala - Morgan Stanley, Research Division

Ranjit Kapadia - Centrum Broking Private Limited, Research Division

Unknown Analyst

Hardik Bora

Bhagwan Singh

Indian stock markets had a volatile outing today. The day's proceedings began on a positive note and sustained buying activity across index heavyweights ensured that the indices stayed above the dotted line albeit within a range. Towards afternoon, selling pressure intensified and pushed the indices into the red with no recovery in the final trading hour too. While the BSE-Sensex closed lower by around 59 points (down 0.4%), the NSE-Nifty closed lower by around 9 points (down 0.2%). The BSE Mid cap closed flat, while the BSE Small cap closed lower by 0.2%. Barring consumer durables and Oil and gas stocks, losses were seen across sectors.

As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 53.55 to the dollar at the time of writing.

Pharma stocks closed mixed today. While Glenmark and Dr. Reddy's

The best India ETF products in 2012 have produced positive gains. All but one delivered double digit performance year to date and that laggard is the largest and most well known ETF of the undiscovered group. The leaders, in order, include:

• The Market Vectors India Small Cap ETF (SCIF)
• The EG Shares India Small Cap ETF (SCIN)
• The EG Shares India Consumer ETF (INCO)
• The EG Shares India Infrastructure ETF (INXX)
• The WisdomTree India Earnings ETF (EPI)

Observations

A few quick observations on this list. First EG Shares is dominating the performance race in this space. Its approach to small caps and sectors has produced results that are impressive. Second, as we have been writing all along, India small cap ETFs continue to lead the entire India ETF group. SCIF has distanced itself from all other ETFs, with a 400bps lead over the next closest fund. Finally, the PowerShares India

By Scott Martin

U.S. investors often stereotype the Indian economy as a cluster of gigantic technology outsourcing companies. But those who bought into the ETFs that most closely conform to that stereotype would have been left lagging not only the real Indian stock market but Wall Street as well.

Out of the many funds that concentrate on India, the most technology-heavy are the PowerShares India Portfolio (PIN) and the iPath MSCI India ETN (INP), each weighted roughly 17% in global outsourcing names like Infosys (INFY), Wipro (WIT) and Patni (PTI).

As it happens, PIN is up maybe 2.4% so far this year and INP has gained 6.2%. In both cases, declines in the tech sector have been substantial as a weak rupee does nothing to save these companies from increasingly fierce competition from the Philippines and elsewhere.

INP at least has a massive overweight in india's high-flying banks ICICI (IBN)

KAR Auction Services (KAR)

Q1 2012 Earnings Call

May 08, 2012 11:00 am ET

Executives

Eric M. Loughmiller - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

James P. Hallett - Chief Executive Officer and Director

Analysts

Matthew J. Fassler - Goldman Sachs Group Inc., Research Division

John Lovallo - BofA Merrill Lynch, Research Division

N. Richard Nelson - Stephens Inc., Research Division

Gary F. Prestopino - Barrington Research Associates, Inc., Research Division

William R. Armstrong - CL King & Associates, Inc.

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division

Patrick Palfrey - RBC Capital Markets, LLC, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the KAR Auction Services, Inc. First Quarter 2012 Earnings Conference Call. Today's call is being recorded. Today's hosts will be Jim Hallett, Chief Executive Officer of

Indian stock markets languished in the red throughout the trading session today on the back of relentless selling pressure across index heavyweights. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex closed lower by around 367 points (down 2%), the NSE-Nifty closed lower by around 114 points (down 2%). The BSE Mid Cap and the BSE Small Cap were not spared either as they closed lower by 1% each. Losses were largely seen in IT and banking stocks.

As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 53.19 to the dollar at the time of writing.

Barring Aventis Pharma, all MNC pharma stocks closed in the red today.

Aventis Pharma declared results for the first quarter ended March 2012. The company clocked 16.4%

Indian stock markets languished in the red for the larger part of the trading session today on the back of relentless selling pressure across index heavyweights. However, the afternoon session saw buying activity picking pace. Sustained buying in the later hours ensured a positive close for the indices. While the BSE-Sensex closed higher by around 82 points (up 0.5%), the NSE-Nifty closed higher by around 27 points (up 0.5%). The BSE Mid cap and the BSE Small cap also notched gains of 0.5% and 0.3% respectively. Gains were largely seen in auto and metals stocks.

As regards global markets, Asian indices closed in the red today while European indices have also opened weak. The rupee was trading at Rs 52.93 to the dollar at the time of writing.

FMCG stocks closed mixed today. While P&G Hygiene and Dabur found favour, Godrej Consumer and Marico closed into the red. Marico announced

The markets India ETF products track concluded the month of April with the first monthly outflow from foreign investors in 2012. This is a red flag for India ETF investors as foreign investment is a large driver of Indian market returns. According to IndiaETFs.com, non leveraged India ETFs lost between 7% - 12% over the last four weeks. Here's a performance grid snapshot from the site.

(click to enlarge)

Outflow Data

Data from Bloomberg shows, foreign investors sold approximately $100 million of Indian equities in April after investing close to $9 billion the first three months of the year. This complete direction change by foreign investors is a 2012 milestone and reflects the growing problems within India. These concerns include a weakening rupee, a large fiscal and current account deficit, rising oil prices and uncertainty around new tax policy on corporations. In fact just last week, S&P downgraded its outlook

With indices in the Indian stock markets making no further attempt at rising, markets closed the day on a negative note. While BSE-Sensex edged lower by around 150 points (down 0.9%), fall on the NSE-Nifty came in at around 50 points. BSE Mid cap and BSE Small cap indices weren't spared either as both of them lost in the region of 1% each. More than three stocks declined for every one that closed the day in the positive on the Sensex.

Most Asian stocks were also covered in red today. Europe though is trading in the green currently. The rupee was placed at Rs 53.4 to the dollar at the time of writing.

With today's fall, the market is effectively flat for the week now. The fall seems to have been triggered by poor performance of the rupee that, if reports are to be believed, fell to a fresh four

The Indian stock markets had a lackluster outing on the bourses today post the market holiday yesterday. After opening in the green, markets remained in the positive zone for a bulk of the trading session today. However towards the final hour or so, the indices trended towards the dotted line and finally closed below par. While the BSE-Sensex closed lower by around 17 points (down 0.1%), the NSE-Nifty closed lower by around 9 points (0.2%). The BSE Mid Cap index also had a negative outing in trade today, closing 0.3% lower. The BSE Small Cap, however closed the day 0.2% higher. Consumer durables were the biggest index gainers by a fair margin, up 2.4%. IT stocks also trended higher. Auto and power stocks had a negative day on the bourses with blue chips trading in the red.

As regards global markets, major Asian indices had a positive today with the

The Indian stock markets had a positive outing on the bourses on the last trading day of the month of April and ahead of the market holiday tomorrow. After opening in the green, markets remained in the positive zone for the entire session today. The indices recovered from the day

India ETF products that are non leveraged experienced a tough week as S&P downgraded their outlook on India from stable to negative. This means that India's credit rating, currently the lowest rating on the investment grade scale, is in jeopardy. Indian markets reacted to this news sending India ETF products like EPI, PIN and INDY down around 3% for the week. Here's last week's India ETF performance grid snapshot from IndiaETFs.com.

(click to enlarge)

Concerns Multiply

India is facing increasingly strong head winds as markets are nervous about factors including the rupee's slide in value, recent budget and tax measures from the Indian government, the mounting fiscal and current account deficit and oil prices. All that concern did not need the addition of the S&P downgrade, but it was the result of the lack of fiscal discipline and political progress from the government of India that forced S&P to act.

India ETF investors had another piece of baggage dumped on them as S&P downgraded their outlook on India from stable to negative yesterday. India currently is clinging to a credit rating of BBB-, the lowest investment grade rating from S&P. Wednesday's change in outlook means there is now a 33% chance India will lose its investment grade rating from S&P. This would significantly increase borrowing costs for the Indian government and state owned enterprises hampering economic growth.

S&P cited concerns about India's fiscal deficit, slowing GDP and lack of progress in reforms to the many issues - including taxation, subsidies and foreign investment restrictions - by the government. On this news the India Rupee continued its downward slide against the U.S. Dollar. This slide is now likely to reach the late 2011 lows which caused considerable economic pain within India. Here's the six month chart of the Indian Rupee in