Nestle SA, the world’s biggest food company, raised its 2011 sales estimate after nine month revenue rose better than expected pace. From January to September primary sales rose 7.3% a year ago which helped by higher prices and strong demand in emerging markets. Revenue on an akin basis will “slightly” thump a long-term target of 5 percent to 6 percent this year reported Nestle. Nestle's brands include Nescafe, KitKat and Perrier water le.

“Nestle is finally feeling the pinch of deteriorating consumer sentiment in the U.S.,” said Marco Gulpers, an analyst at ING Financial Markets.

Over first nine months, sales in Europe raised by 3.8% and in America rose by 5.6%. With sales in Asia, Oceania and Africa edging by robust growth of 11.7%, these emerging markets saw double digit growth.

Commodity prices will probably remain high, though price increases may be more “normal” going forward, Chief Executive Officer Paul Bulcke said.

"In a tough environment, we continued to build our capabilities and positions for the future while maintaining strong growth across regions and categories” said CEO Bulcke.

China’s big banks shares elevated after the country’s sovereign wealth fund announced it was lifting its stake in them. The conjugal arm of China Investment Corporation, Central Huijiin, bought shares in four major banks on Monday, reported the official Xinhua news agency. Since the global financial crisis in 2008 this is the first share purchase. The main intend of this share rise was to enhance the confidence shaken by foreign markets and domestic policy. Shares in Agricultural Bank of China edged more than 12% on Hong Kong's main index, whereas Industrial and Commercial Bank of China rose 7% in early trade.

Victor Wang from Macquarie Securities said "They're showing confidence in the banks, and support from the central government,"

As per Financial Times Chinese banks shares have fallen 30% in recent months.

Though Chinese growth persists to show strength, analysts report investors are worried about the euro zone debt crisis and a slowdown in the US economy.

Details of the move by Central Huijin were given by four Chinese leaders later. Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank Corporation and Bank of China said 39.1 million, 14.6 million, 7.4 million and 3.5 million of their Shanghai-listed shares were bought on Monday

The figures only amount to a small boost in the stake held by Central Huijiin in the banks, which is by now the largest shareholder in the country’s big lenders. It also added in a report to the Hong Kong stock Exchange that it will keep on amplifying its holdings in the four banks over the next year

The markets across the globe have had a tumultuous week. With the Dow Jones industrial index shedding over 300 points. Much of the downturn has primarily been on the age old news of the Euro crisis which seems to be worsening day by day. Adding to this the downgrade of US from the credit rating agency has fuelled negative sentiments in the markets.  Figures also showed that the US economy has not added any job at all over the month. This adds additional pressure on the US government and Obama to create jobs and revive the economy at the earliest.

Earlier in the week fresh concerns were raised on a possible default from Italy raising fears that there could be a line of EU countries in trouble. Italy’s parliament is also looking at approving package of spending cuts and new taxes of around Euro 45.5 billion. Italy has been criticized and warned by the ECB over a possible default. ECB’s president has urged Rome to keep its word and push the package.

It is essential that the target which was announced to diminish the deficit will be fully confirmed and implemented," Trichet said at an annual economic forum.

Greece’s prime minister has promised that all the austerity measures will be in place before the next bailout package is issued to the country. One can only hope that Europe puts its house in place before the economy deteriorates further. Additional stimulus could add more pressure on countries such as Germany and France to infuse fresh funds. Across in Asia, there are also concerns of a possible real estate bubble burst in China and a possible default in loans. This could create a ripple across the Asian markets as the Chinese economy has been the largest growing economy in the world.

The stock market in the U.S., as well as the global market place, is currently being challenged. Stock indices are being pressured and recent outcomes have skewed negative. The week was marred by news of a possible default by European countries such as Greece and Italy. There were fresh fears on how Germany and France may not be able to pull out the rest of the defaulting countries.

Over in the US analysts across fund houses have raised concerns over the slowdown in the economy

The Dow Jones Industrial Average dropped lower by over 172 points last session and closed out at 10,817.65. The NASDAQ finished lower by over 38 points to close out at 2,341.84 and the S&P 500 closed lower by over 17 points at 1,123.53.

The Dow Jones ended the week lower overall by 4 percent. The NASDAQ ended the last week lower by 6.6 percent and the S&P 500 ended lower by 4.7 percent. The indices in the U.S. have been taking cues from markets overseas and the cues have been negative. More of the same volatility is expected for the upcoming week.

Economic posts expected over the next week will attract an above average amount of attention. Investors on Wall Street will attempt to process new data in hopes of extracting more positive spin. There are no noteworthy economic posts scheduled for Monday in the U.S. Stock market trends are likely to follow global market cues this day.

On Tuesday, new homes sales data is scheduled to post via the Commerce Department. Economists expect this report to skew negative. Noteworthy earnings data this day will post from H.J. Heinz. On Wednesday, investors will focus in on the durable goods orders data posting for July from the Commerce Department. This report is expected to remain relatively flat. On Thursday, weekly jobless claims data will post via the Labor Department. Investors are expecting unemployment claims to post better than last week’s unemployment claims data. Noteworthy earnings data this day will post from Big Lots and Hormel.

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The Dow Jones industrial average is down 419 points, or 3.7 percent, to 10,991. The S&P 500 is down 53, or 4.5 percent, to 1,141. The NASDAQ composite is down 131, or 5.2 percent, to 2,380. The markets factored in the weekly news in the correction as there was no fresh news that led to the turmoil. Further leading analysts at JP Morgan and Citi Group are convinced that the US economy is facing a slowdown.

The index is less than 100 points above the low for the year that it reached last week.

"The markets already are pricing in a slowdown," said Peter Kenny, a trader at Knight Capital Group. "Any data we get this next week, the market is telling you it's going to be negative."

The Dow Jones industrial average ended the day down 172.93 points, or 1.6%, at 10,817.65. The Standard & Poor's 500 index dropped 17.12 points, or 1.5%, to 1,123.53 points, while the NASDAQ composite index fell 38.59 points, or 1.6%, to 2,341.84.

Investors again sought out the safety of gold and Treasury bonds, which saw their prices rise. The pessimism dominating the markets Friday made the beginning of the week, when stocks were heading up for the third straight day, seem a distant memory.

The almost daily back-and-forth movements of the markets reflects the uncertainty among experts as to whether the economy is heading back into recession or just slowing down temporarily.

Jim Paulsen, chief investment strategist for Wells Capital Management, said if a recession is coming, stocks still have further to fall. On the other hand, he said, if there is no recession, stocks are probably priced too low.

Traders are waiting on the edge of their seats for an answer to this question, but Paulsen said it would only be revealed slowly through a succession of new data points.

U.S. stocks rallied on Wednesday, sending the Dow Jones industrial average to a record close, as investors were relieved by Federal Reserve Chairman Ben Bernanke's comments that inflation is poised to ease while the economy grows moderately. The message was a clear confidence among the federal bank on how they plan to curb inflation in due course

The Fed chief's message in testimony to Congress eased worries that the U.S. central bank might raise interest rates in an effort to control inflation in the near term. Traders said Bernanke's comments increased hopes that the Fed may cut rates later in the year, which could help enhance corporate profits.

Bernanke told the Senate Banking Committee the economy seems likely to expand at a moderate pace this year and next, with growth strengthening as the drag from housing ends. He added there were indications that inflation pressures were beginning to diminish.

The Dow Jones industrial average .DJI rose 87.01 points, or 0.69 percent, to end at a record 12,741.86, its 28th since the beginning of October. The Standard & Poor's 500 index .SPX advanced 11.04 points, or 0.76 percent, to finish at 1,455.30. The Nasdaq Composite Index .IXIC gained 28.50 points, or 1.16 percent, to close at 2,488.38.

It was the second day of strong gains for the stock market. On Tuesday, the Dow snapped a three-day streak of losses and had its biggest gain of the year.

The yield on the benchmark 10-year U.S. Treasury note US10YT=RR fell to 4.74 percent, down from 4.79 percent before Bernanke's testimony, and down from 4.81 percent late on Tuesday. The Fed chief's calm assessment of inflation pressures and the economy stirred a relief rally in the bond market. The 10-year note's price, which moves inversely to its yield, shot up 19/32.

Stock markets across the world are taking a beating; there are concerns on if the Greek government could sanction the austerity measures. Back home there are concerns on the employment. Unemployment rates rose last month in more than half of the nation's largest metro areas, driven higher by weak private-sector hiring and natural disasters.

Amidst such troubles, Dow Jones Industrial Average gained 1.21% or 145.13 points at 12188.69. Nasdaq Composite added 1.53% or 41.03 points at 2729.31. On economic data front, home prices in major US cities gained for the first time in eight months and consumer confidence slipped to its lowest since November 2010. Optimism on the Greece Government sanctioning austerity measures have also provided for some boost to the markets over the long run.

A primary fear is that if European banks indebted to the funds are weakened in the crisis, then it might have a hard time repaying its loans. The funds hold large amounts of debt of banks in nations at the core of Europe, like France and Germany. They now lend about $240 billion to French banks, or 14.8 percent of the funds’ assets, according to Fitch Ratings. But even the perception of trouble could send panic across the markets and force investors to withdraw the money

Gold and other commodities made a rebound and settled higher. Gold for August delivery rose $10.20 to settle at $1,510.40 an ounce Wednesday. July silver rose $1.112 to settle at $34.750 an ounce. Demand for gold and other precious metals remains strong, partly because of political wrangling that is holding up an agreement on raising the debt limit for the United States. Gold prices tend to rise when investors expect disruptions in other financial markets, as would certainly be the case if the U.S. edged anywhere close to a default on its debt.

US stocks were a mixed bag over the week, first rallying and then tumbling back down as investors were transfixed by the high-stakes drama surrounding the Greek debt crisis. German Govt has said that the EU will not sanction the next tranche of payments to the greek government unless its provides for austerity measures.

The Dow Jones Industrial Average, representing 30 blue-chip stocks, was down 0.58 percent for the week, closing at 11,934.58 on Friday. In all, the Dow has fallen about 7 percent since April. The broader Standard & Poor’s 500 slid 0.24 percent to end the week at 1,268.45. However, the tech-heavy NASDAQ Composite rose, climbing 1.39 percent to close at 2,652.89.

The US$40 billion package of cuts is unpopular, but has been demanded by the EU and the IMF as a precondition for further support. The markets also took some confidence as the Greece Prime Minister survived a vote of confidence. However, reports across Europe have cautioned that Italy could next be in the line of a debt crisis.

Closer to home, markets worried about the US’ own looming debt problems, as Democrats and Republicans appeared no closer to a deal to raise the debt ceiling and avoid a US default by Aug. 2.In a sign of continued weakness in the world’s largest economy, the US Federal Reserve slashed its US economic growth forecast for this year to a range of between 2.7 and 2.9 percent, down from its April of 3.1 to 3.3 percent.

“There are so many uncertainties with the Greek vote, the US debt ceiling [that] it’s less about the news of the day, the economic data, than the big picture,” Marc Pado of Cantor Fitzgerald said.

After a meeting of its policy--setting Federal Open Market Committee this week, the Fed confirmed that QE2 would end as scheduled by June 30, though it vowed to maintain near-zero interest rates “for an extended period.

Stocks slid deep into the red on Friday, as disappointing results Oracle and Micron Technology weighed heavily on tech stocks, offsetting slightly positive economic reports on U.S. gross domestic product and durable goods orders. The Dow Jones industrial average (INDU) lost 115 points, or 1%; to close at 11,935. The Dow fell 0.6% for the week a seventh straight fall in eight weeks.

The index was dragged lower by the Dow's tech components Microsoft, Intel (INTC, Fortune 500) and Cisco (CSCO, Fortune 500), and, separately, the drug company Pfizer (PFE, Fortune 500). Shares of Pain Therapeutics (PTIE), which co-developed the drug with Pfizer, plunged 43%. Coca Cola have announced an increase in prices of the beverages to offset increase of raw material costs.

The S&P 500 (SPX) shed 15 points, or 1.2%, to 1,268; and the tech-heavy Nasdaq Composite (COMP) fell 34 points, or 1.3%, to 2,653.

Tech shares were also the biggest laggards on the Nasdaq and S&P throughout Friday's session, following disappointing results from Oracle and Micron. Although Oracle's per-share earnings were in line with expectations, the company's hardware division struggled. Shares fell more than 4%.

Technology companies have exposure overseas as we continue to deal with the issues in Europe and Japan and hence investors fear an impact on the earnings for the upcoming quarter. Investors continue to follow developments out of Europe, where an agreement was reached Thursday among Greek leaders, the European Union and IMF.

The European Union pledged to extend aid to Greece, as long as the country introduces another round of tax hikes and spending hikes -- in an effort to help the debt-stricken country avoid a default. The dollar weakened against the British pound and the Japanese yen, but rose versus the euro.

The shares of Pandora Media was humming a sweet tune on Wednesday for its investors as the Internet radio company's shares surged in its stock market debut. Pandora, which runs a free music streaming and recommendation service, is the latest Web Company to launch in a market hungry for tech startups. This could be followed suit by public offers by social media heavyweights like Facebook.

Shares of LinkedIn, the social network for professionals, more than doubled on their first day of trading. The company made a strategic decision to go public just after LinkedIn Corp., but well before some big names like Groupon Inc., Zynga Inc. and eventually Facebook Inc. And it has reaped benefits of investors thirst for shares of social networking websites.

The company has been making losses on its business. This again brings the question on how viable social networking websites will be in the future. The company is trading at about 21 times its 2010 sales.

Pandora has more than 94 million registered members, including 34 million who tune in at least once a month to a personalized online radio service that launched in 2005. Members select favorite songs, genres and artists and Pandora's algorithms create playlists that are based on a huge database - called the Music Genome Project - the company has been building since its inception in 2000.

The company also faces severe competition in the future. Several technology giants, including Google, Amazon.com and Apple, have recently expanded their digital music services. Plus start ups which provide cost effective service to consumers could eat up the market shares of the company. Investors should probably look at reaping benefits from the stocks and selling it at profits.

Food inflation has surged to a two month high of 9.01% by the week ending May 28. The culprits behind the rise were onions, protein based items and fruits. This was contrary to projections by the government of a moderation in price hike of food items.

Food inflation, indicated by the Wholesale Price Index (WPI), touched as high as 20.62 per cent in May last week of 2010 compared to 8.06 per cent in the previous week.

The latest figures indicate the highest level of food inflation since 9.18% was clocked in the week ending March 26. The rate of food price rise has been lesser than 9 per cent mark in the last two months.

As per official govt data, Thursday, fruits became 30.78 per cent costlier year-on-year, while onions surged by more than 14 per cent.

During the week reviewed, milk prices increased by 8.49 per cent and egg, meat and fish became costlier by 6.99 per cent. Cereals were also dearer by 5.77 per cent on a year on year basis.

Thankfully, some items beat the trend with prices of pulses which went down by 9.49 per cent year-on-year and vegetables and potatoes became less costly by 0.20 per cent and 2.87 per cent.

However there was reason to cheer in the case of non-food articles. Price rise in non-food primary articles plunged to 20.97 per cent, compared to 21.31 per cent in the previous week. This is good news for the government and the Reserve Bank, who termed price rise pressure from the core (non-food) segment as the worst threat to the economy in the near future.

In the non-food segment, fibres became costlier by 56.56 per cent year-on-year, while minerals were dearer by 12.11 per cent. Fuel and power became costlier by 12.46% and petrol by 33.23% year on year in the week reviewed.

The main reason for pressure of inflation during 2010 was the surge in food prices. Food inflation was in double digits mostly last year, before moderating in March in 2011.

Hindalco Industries posted a consolidated net profit of Rs 2,456 crore for the year ended March 2011, as against Rs 3,925 crore for 2009-10. Net sales were Rs 72,077 crore as against Rs 60,708 crore for 2009-10, up 19 per cent and the best-ever performance.

The company said strong volumes, improved product mix and higher commodity prices had been the growth drivers. Total expenditure grew by Rs 13,080 crore, to Rs 66,826 crore for the year, on the back of higher raw material costs.

The Ebitda (earnings before interest, taxes, depreciation and amortization) fell to Rs 8,433 crore versus Rs 10,069 crore in 2009-10. The latter result was higher, the company said, because of a one-time exceptional gain on derivatives of Rs 2,736 crore. For 2010-11, the company has posted a derivatives loss of Rs 291 crore.

On a consolidated basis the company has posted a loss, but increase in the top line has been able to help the company. The company’s subsidiary from Canada Novelis has also posted in good numbers. Novelis reported a good set of numbers, with volumes rising 8% and sales up 22% in the March quarter from a year ago. During fiscal 2011 (FY11), net sales gained 22% and adjusted Ebitda rose 42%.

Among new projects, some worries are emerging for the company. Equipment for its Utkal Alumina, Mahan Aluminium and Aditya Aluminium smelters is already tied up. But it is experiencing inflationary pressures in civil and other related works. These projects are due for commissioning between end-2011 and end-2013. The company is also looking at some strategic investments in Europe, Brazil and Russia with a view of increasing the capacity in emerging economies to 40% from 31%.

On a medium to long term basis we feel the company is expected to do well as new mines acquired by the company will be able to provide the necessary supplies. Demand for demand copper is also likely to benefit the firm. RH Nifty +Portfolio

February 2011 This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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