Outsourcing has come through a lot of changes since its inception. Its evolution depends on a number of factors, like how the market reacts, government intervention, partnerships, and geographical positioning to name a few. The industry adapts to changes in the business environment which is crucial to its survival.

During the past five years, the Sensex has delivered annual average earnings of Rs 630. A market trading at 13,750 has a 21X prior cycle earnings multiple; it certainly looks expensive. Yet one has to consider that the year ended 31 March 2009 is expected to be a trough earnings year; Sensex delivered earnings of 850 during this year.

Going forward, over the coming political cycle, GDP growth in India can be expected to grow at at least 6%. Because GDP growth reflects slower growth rates in the agrarian sector of the economy, this should translate to 9% growth in corporate earnings. With reversion to a 6% long term inflation rate, nominal earnings growth can be expected to hit 15%.

Very quietly, two developments occurred in India over the last week that could have major implications for the gold market. Both of these developments could portend drastic changes in gold demand from a key market, just as the inflationistas believe they are at the threshold of a paradigm shift in the precious metal’s pricing.

Not so content with the budget measures announced today, market participants reacted harshly by engaging in a mass sell-off. Just an hour before noon, the indices’ downward journey began and subsequently continued till the close. The Sensex ended the day lower by about 870 points (5.8%), while the NSE-Nifty closed lower by around 260 points (5.8%). Barring stocks from the FMCG sector, selling activity was witnessed across the board, led by stocks from the banking, realty and capital good spaces, whose respective indices were down in the range of 7% to 8%. The overall decline to advance ratio was stood at 3.5 to 1 on the BSE.

Most of the other Asian markets also ended the day on a weak note today. Stocks in Europe are also trading in the red currently. Rupee was trading at 48.49 against the US dollar at the time of writing.

A few days ago, Dr. Oatley wrote about the attempt by the U.S. House of Representatives to cap greenhouse emissions and coerce other countries into doing the same:

This time it is the Waxman-Markey cap and trade legislation. The intent of the legislation--reduce greenhouse gases--addresses concerns of the Democrats' median voter, who cares deeply about climate change. Producers, however, are concerned that the higher energy costs generated by cap and trade will disadvantage them relative to Chinese firms who are not facing higher energy costs because China does not regulate greenhouse gases. The solution, added late to the legislation, is to impose tariffs on goods from countries that do not regulate GHG (i.e., China). Nobody really wants to impose tariffs, but the hope is that the threat of tariffs will be sufficient to induce China to agree to international regulations on CO2 emissions.

The global economic recession is projected to impact the economy of India adversely taking down the GDP for this year according to paper titled “Indian Economic Outlook 2008-09 and 2009-10″ from the Indian Council for Research on International Economic Relations [ICRIER]. The authors also argue that “There is real downside risk that the growth rate could plummet to the pre-1980s levels if appropriate countercyclical measures are not taken immediately and are not urgently followed by necessary structural reforms”.

As the recession continues to slow consumer demand, governments across the world are stepping up their export of goods and services. This is true in India as well as the chart shows below. The government consumption expenditures as a percentage of GDP is rising faster as the private final consumption expenditure is going down.

After weathering the alternate bouts of buying and selling activity through the day, the Indian markets closed marginally higher than yesterday’s levels. The BSE Sensex and NSE Nifty ended higher, up by around 13 points and 8 points respectively. The stocks from the mid-cap and the small-cap spaces ended higher, up by around 0.33% and 0.74% respectively. Buying activity was witnessed among the stocks from the metals, realty and healthcare sectors. Engineering and auto stocks were at the receiving end. The overall market breadth was positive, with gainers outnumbering losers in ratio of 1.2 to 1 on the BSE.

Most of the Asian markets ended the day on a weak note. The European markets are also trading weak currently. The Rupee was trading at 47.91 against the US Dollar at the time of writing.

Although the Indian markets witnessed some volatility during the previous hour, they managed to end the day well above yesterday’s closing level. The BSE-Sensex ended with gains of about 150 points, while the NSE-Nifty ended higher by about 50 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note as well, recording gains of 1% and 0.3% respectively. Apart from stocks from the consumer durables space, buying activity was witnessed in stocks across the board, led by the realty, banking and auto spaces.

Most of the other Asian markets ended the day on a firm note today. The European indices are currently trading in the green as well. Rupee was trading at 48.00 against the US dollar at the time of writing.

The Indian markets continued their downward journey as selling activity persisted till the final minutes of trade. The BSE-Sensex ended lower by around 290 points, while the NSE-Nifty closed lower by about 100 points. Stocks from the mid-cap and small-cap spaces ended the day on a weak note as well, recording losses of 2.9% and 2.5% respectively. Selling activity was witnessed in stocks across the board today, with the pack led by stocks from the realty, metal and capital goods sectors.

Other Asian markets ended the day on a mixed note today. The European indices are currently trading in the red. Rupee was trading at 47.99 against the US dollar at the time of writing.

Although WPI is indicating deflation, no one in India is concerned about it and this negative number is attributed to high base index. In India, inflation is actually calculated year-over-year (y-o-y), unlike other economies where inflation calculated as annualized month-over-month (m-o-m) change. Thus, the base index plays an imprtant role in inflation calculation in India.

The Indian markets gave up the huge gains they had registered during the second half of today’s trading session, and closed on a flat note as selling activity intensified during the fag end. The BSE Sensex and NSE Nifty ended higher by around 10 points each. However, the stocks from the BSE mid-cap and BSE small-cap indices ended strong, up by around 1.2% and 1.5% respectively. Buying activity was witnessed in stocks from the metal, realty and banking spaces, while stocks from auto and software spaces ended on a negative note. The overall advance to decline ratio was poised at 1.7 to 1 on the BSE.

Most of the other Asian markets ended the day on a weak note. The European indices are currently trading in the green. The Rupee was trading at 48.15 against the US Dollar at the time of writing.

I covered earnings for Accenture (ACN) over at AOL Money + Finance, and want to use this opportunity to dive more into the conference call and prospects for the stock. First, the numbers were pretty strong, with the main drag being currency-related.

From the earnings write-up (“Accenture shares rise on earnings beat”):

Persistent buying activity during the day led the markets to end the week on a strong note. The BSE-Sensex ended higher by around 419 points, while the NSE-Nifty closed up by about 135 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note, recording gains of 2.4% and 1.9% respectively. Buying activity was witnessed in stocks from the banking, consumer goods and IT spaces, while stocks from healthcare ended on a negative note.

Most of the other Asian markets ended the day on a positive note today. The European indices are currently trading in the green. The Rupee was trading at 48.27 against the US Dollar at the time of writing.

In line with yesterday’s post on some pending changes to the Secular Trends Model Portfolio, I am blowing out the remaining 1850 shares of Schering-Plough (SGP) in the model. SGP has really just been a floater since the announcement of Merck’s (MRK) buyout in early March, which initially valued Schering shares at $23.60 in cash and stock.

Since I have no particular desire to hold MRK shares (or deal with the record-keeping of this corporate event), I’m getting out now, happy with the 90% gain but a little frustrated that I didn’t exit on March 10th. At the time I was still quite skittish on the broader markets, and my thinking was that I was happy to ride along with a stable Big Pharma (MRK as the tracker) through the Spring. If I had known the S&P would shoot up 40% those three months, well - you get the picture.

Dear Clients and Prospective Clients:

At the start of the year, we at Smead Capital Management predicted that 2009 would be like 1988. In the aftermath of the 1987 Stock Market Crash the market thrashed around violently in both directions before settling at the end of the year with about a 10% gain counting dividends. People had to put up with a great deal of volatility to earn that gain in 1988 and we felt that 2009 would look similar. We are halfway through the year and 2009 appears to be 1988 on steroids. The down swings and upswings have already been huge, but the stock market is about where it started the year.

If current trends continue, there is no doubt that there will be wars fought in the 21^st century over water. Not oil. Not ideology. Not theology. Water. Survival.

It takes somewhere between the three pounds of grain the National Cattlemen's Beef Association estimates and the sixteen pounds some environmentalists and vegetarians claim to produce a pound of beef. I believe the truth lies closer to the cattlemen’s numbers – all the ranchers I know, and I know plenty, graze their cattle where they consume vast quantities of weeds and natural grasses. What business person wants to buy grain, adding to their cost of doing business?

Buying activity during the second half of today’s trading session led the markets to recover their losses and end the day on a positive note. The BSE-Sensex ended higher by around 98 points, while the NSE-Nifty closed up by about 45 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note, recording gains of 2.3% and 2.2% respectively. Buying activity was witnessed in stocks from the power, consumer durables and health-care spaces, while stocks from oil & gas and banking space led the pack of losers.

Other Asian markets also ended the day on a positive note. The European indices are currently trading in the green as well. Rupee was trading at 48.45 against the US dollar at the time of writing.

By Neena Mishra

The World Bank has projected (in its Global Development Finance Report) that the Indian economy will grow at 8% in 2010, which would make it the fastest-growing economy in the world for the first time, surpassing China, which is projected to grow at 7.7% rate. Please read Dirk Van Dijk's post for more information about the World Bank's forecast on the global economy.

The AFG 50 is an actively managed portfolio of 50 stocks, designed to outperform its benchmark (S&P 500) while remaining sector-neutral. The AFG 50 Portfolio serves as an outsourced research team, as our analysts monitor each major economic sector to provide our clients with actionable buy ideas backed by detailed models, reports, updates and a backup list for possible replacements within each sector. Anytime there is a change made to the portfolio, i.e., a new stock, reiterated/change of buy/sell recommendation or adjustments made to models, our clients are immediately notified via e-mail.

The AFG 50 was launched on June 10, 2004 at AFG’s inaugural client conference. Through June 1st, 2009, our clients have enjoyed the following performance:

Though the markets made good a part of their losses during the final hours of trade, they ended the day in the red. The BSE-Sensex ended lower by around 50 points, while the NSE-Nifty closed lower by about 9 points. The overall decline to advance ratio was poised at 0.8 to 1 on the BSE. Barring select stocks from the oil and gas and power sector, selling activity was witnessed in stocks across sectors with the pack led by banking, metal, fmcg and consumer durable spaces.

Most of the other Asian markets ended the day deep in the red today. The European indices are currently trading in the green. Rupee was trading weaker at 48.68 against the US dollar at the time of writing.