12:30PM PepsiCo Q3 profit up 71% on revenue rise of 9.4%.
PepsiCo (PEP: chart), second largest beverage and snack maker, reported third quarter profit of 88 cents per share compared to 51 cents a share a year ago. The company reported profit in the quarter of $1.48 billion in the period, a rise from $864 million from a year ago. Revenue rose $8.95 billion from $8.18 billion a year ago.

The company raised its earnings guidance for the full year to at least $2.98 per share from $2.95 a share. Analysts were looking for $2.99 per share of earnings for the year. The company stock recovered from early loss of 2.2% on the news.

PepsiCo also mentioned in the conference call that it is confident of its outlook and earnings guidance for the year. Pepsi International which accounts for 37% of revenue of the company said that recent pesticide controversy relating to the company in India has affected sales in August and improved in September, but declined to reveal numbers. Several media reports in India have suggested that Pepsi sales may have declined between 35% and 45%. The company CEO also said that it has increased prices for its Tropicana brand orange juice and blamed it on the “more structural price increase in oranges”.


11:30PM August trade deficit rose to $69.9 billion. Goods deficit increased $1.9 billion.
The familiar trade deficit with the rest of the world rose in August. China and OPEC, two of the largest trading partners accounted for $33.2 billion in goods deficit of the total August month goods deficit of $75.5 billion. In August export rose to $122.4 billion and import rose to $192.3 billion accounting for goods and service deficit of $69.9 billion. The U.S. is set to record rising and record trade deficit for the fifth year in a row.

Crude oil imports in August jumped to $20.8 billion and natural gas import rose to $2.5 billion. For the year so far crude and natural gas imports are running at 34% higher than a year ago to $148.7 billion. Record deficit in August is likely to take the annual deficit for the year above $780 billion, at least 9% higher than a year ago deficit of $716 billion. Deficit with China for the year is likely to grow 10% from a year ago deficit of $202 billion.

In the month of August, U.S. recorded $22 billion deficit with China, $11.2 billion with OPEC, $7.5 billion with Japan, $6.5 billion with Mexico and $6.08 billion with Canada. U.S. also recorded $8.9 billion deficit with Europe and $1.1 billion with India.

10:30AM The Sensex adds 185 points as industrial production was reported at 9.7%

The Sensex on BSE finished 184.49 points, or 1.4%, to end at 12,537.98. The market-breadth was very strong. Against 1,388 shares that advanced, 1,085 declined and 72 shares remained unchanged. Advancers outpaced decliners by 5 to 4. From the 30-Sensex stocks, 27 advanced while the rest declined. The turnover on BSE was Rs 3,404 crore, compared to Rs 3,689 crore on Wednesday. The turnover on NSE was Rs 6,719.53 crore.

Economic news

The industrial production of India in August advanced 9.7% from a year earlier, weaker than the previous month, as floods in the industrialised belt in the west of the country disrupted output.

Advancers

Reliance Industries gained 2.6% to Rs 1,173.70, following reports that it had again reduced retail prices of petrol and diesel. State-run oil marketing firms soared on weaker global crude oil price. HPCL surged 7% to Rs 329, BPCL gained 3% to Rs 413.90 and Indian Oil Corporation rose nearly 1.1% to Rs 567.

Infosys rose 2% to Rs 2,022. The company posted on Wednesday strong second-quarter September 2006 results, and has also revised upwards earnings and revenue guidance for 2007 fiscal year. Other IT stocks took their cue from Infosys. HCL Tech surged 4.7% to Rs 583, TCS rose 3.8% to Rs 1,085, Wipro advanced 3.3% to Rs 546.50 and Satyam Computer gained 1.9% to Rs 423.

Auto shares also rose on hopes of strong earnings results. Bajaj Auto gained 2.6% to Rs 3,147.80, car large-cap Maruti Udyog moved up 2.7% to Rs 960 and Tata Motors rose 2% to Rs 899.

Bank shares also jumped on the bandwagon of strong earnings results. SBI rose 2.7% to Rs 1,032. ICICI Bank edged up 0.4% to Rs 690, higher than an early low of Rs 672.50.

Cement shares also rose by the same token. ACC advanced 1.8% to Rs 989, Gujarat Ambuja Cements gained 1.5% to Rs 121.80, Grasim rose 2.6% to Rs 2,640 and UltraTech Cement notched up 1.2% to Rs 890.

Decliners

Hindustan Lever led the decline. The company declined 0.83% to Rs 233.20 and HDFC Bank fell 0.52% to Rs 959.95. Although down 0.5%, HDFC Bank was up from an early low of Rs 947.20.

Corporate news