Thinking austerity

The serenity of mind, gentleness, silence, self-restraint, and the purity of mind are called the austerity of thought.”

- Bhagavad Gita.

The all-pervasive message at the moment is: fix Greece and the world will be a better place to live. News of fresh election in Greece has raised worries of its exit from the euro and broader financial meltdown. Already there are reports of run on bank deposits. US stocks declined as worries over Greece overshadowed encouraging economic data. Fed policy makers are somewhat worried about US outlook, have hinted at further easing. European stocks closed mostly in red. Asian markets are flat to indecisive.

The FM has blamed Greek turmoil for all that is going wrong with the Rupee and the Sensex. He has hinted at some sort of austerity measures and in the same breath has advised not to get panicky. While austerity may suit long term goals, policies to promote growth are the need of the hour now. What will UPA II does post the Budget session is the question. The start is likely to be a tad better. The big question is whether the early gains can be sustained. Further selling is not ruled out given the trepidation over Greece, a fragile Rupee and weak FII flows.

Q4 FY12 result preview:
Bajaj Auto – Revenues Rs48.5bn (+15.4% yoy), PAT Rs7.9bn (+17.7% yoy).

ADR/GDR
	Latest (US$)	Price % chg	% Prem/Disc
Dr. Reddys	30.5	1.2	(0.0)
HDFC Bk	29.5	(3.0)	8.0
ICICI Bk	28.9	(2.3)	(0.8)
ITC	4.2	(2.2)	0.6
Infosys	43.4	(1.5)	(0.1)
Ranbaxy	9.3	0.0	3.0
Reliance	25.1	(1.6)	1.0
Wipro	8.8	(3.2)	22.7
SBI	68.0	(2.2)	1.4
Tata Motors	24.4	(6.9)	(1.2)
Sterlite	7.2	1.6	(0.8)
L&T	22.3	(1.4)	0.7

Indian market		% change
	Last close	1 day	3 mth	YTD
Sensex	16,030	(1.8)	(12.4)	3.7
Nifty	4,858	(1.0)	(12.7)	5.1
BSE 100	1,981	(1.5)	(12.4)	7.0
BSE 200	6,214	(1.5)	(12.2)	7.5
CNX Midcap	6,902	(0.3)	(12.9)	12.9
BSE Smallcap	6,265	(1.1)	(12.0)	12.9
Developed market		% change
	Last close	1 day	3 mth	YTD
Dow Jones	12,599	(0.3)	(2.7)	3.1
Nasdaq	2,874	(0.7)	(2.6)	10.3
S&P 500	1,325	(0.4)	(2.7)	5.3
FTSE	5,405	(0.6)	(8.5)	(3.0)
CAC	3,049	0.3	(11.4)	(3.5)
DAX	6,384	(0.3)	(6.8)	8.2
Hang Seng*	19,349	0.5	(10.0)	5.0
Nikkei*	8,780	(0.2)	(6.4)	3.8
S&P/ASX200*	4,140	(0.6)	(1.3)	2.1
* Markets are open
Emerging market		% change
	Last close	1 day	3 mth	YTD
Shanghai Comp	2,350	0.2	(0.3)	6.8
Brazil Bovespa	55,888	(0.6)	(15.6)	(1.5)
Mexico Bolsa	37,511	(1.1)	(1.1)	1.2
Kospi*	1,841	0.0	(9.0)	0.9
Micex	1,335	(0.7)	(14.9)	(4.8)
Taiwan*	7,286	0.7	(7.7)	3.0
Straits*	2,841	0.4	(5.3)	7.4
* Markets are open
Institutional activity
(Rs cr)	Cash	F&O	MTD	YTD
FIIs	(136)	378	315	43,785
MFs	-	-	(263)	(6,220)
FIIs Prov.	(547)
MFs Prov.	172
Commodities		% change
	Last close	1 day	3 mth	YTD
Crude (US$/bbl)	93.1	0.3	(9.9)	(5.8)
Gold (US$/oz)	1,546	0.4	(10.3)	(1.1)
Copper (US$/mt)	7,695	(1.3)	(7.1)	1.4
Aluminium (US$/mt)	1,994	0.5	(5.9)	(0.1)
Zinc (US$/mt)	1,900	(1.8)	(3.0)	4.0
Advance/Decline stocks
(Nos)	A	B	S	Total
Adv	49	701	1,216	1,440
Dec	154	1,280	2,032	1,270
Unch	1	84	145	136
A/D ratio (x)*	0.3	0.5	0.6	1.1
*A/D excluding Unch
Trade value
(Rs cr)			% chg
Cash NSE	10,550		8.4
Cash BSE	1,807		1.7
Total Cash	12,357		7.4
Delivery (%)	38.2		-
Derivatives	123,772		21.4
Currency		% change
	Last close	1 day	3 mth	YTD
Rs/US$	54.50	1.3	(9.6)	(2.6)
Rs/EUR	69.32	0.3	(6.4)	(0.8)
US$/GBP	1.59	0.1	0.6	2.4
US$/EUR	1.27	0.2	(3.1)	(1.7)
Yen/US$	80.30	(0.0)	(0.9)	(4.2)
Bond market
	Last Close (%)		Bps chg
10yr Gsec	8.51		0.00
Call rate	7.80		(0.45)