0725

24 July 2009

Indian stocks continue to surge as a result of encouraging corporate results. The biggies on show yesterday included Maruti, which has been able to improve both turnover and profitability - the former partly as a result of enhanced exports. Bharti, the largest Indian telecom operator, on the other hand, exhibited the profit pressures arising from growth and a thrust into rural areas, where usage per customer is lower. The stock dropped marginally in response.

Europe, particularly the UK, was strong, too, and in the US, the Dow coasted past the 9000 mark for the first time in 2009. Macro-economic numbers continue to be mixed, with housing resales up marginally, while prices continue to fall; fresh unemployment seems to be up again, though at a lower pace than in the first quarter of the year.

Some businesses, though, seem to have done better than expected, and trading yesterday was bouyed by the fact that AT&T and 3M had not suffered as badly as feared. After markets closed, though, Microsoft reported that sales had plummeted 17%. This was partly attributed to a slump in hardware sales; but much of it is also due to a shift of consumers towards the mini-sized netbooks, which run either on open-source software, or on stripped-down versions of Apple products. This is unlikely to reverse any time soon.

Banking and credit card major, Amex, also reported numbers considerably weaker than expected, so expect US stocks to be more tentative today.