Markets may open sideways in line with mixed global cues

Opening Bias

Last week U.S. stocks finished mostly higher, after shifting between gains and losses throughout the trading session, as relief over European progress in combating regional debt helped key indexes score weekly gains. Equities also climbed as investor confidence rose after the U.S. economy expanded in the third quarter at the fastest pace in a year, as gains in consumer spending and business investment helped support a recovery on the brink of faltering. Separate data showed that consumer confidence unexpectedly rose in October, while fewer Americans filed for unemployment assistance last week.

Asian shares this morning have also been trading on a mixed note tracking cues from a choppy closing witnessed in the European markets as Italy’s borrowing costs surged at an auction. The Asian markets are also awaiting the key Monetary Policy data from Japan today.

Now with the markets also posting some hefty gains in the month of October coupled with good FII inflows one may expect this diwali to bring in some joy and optimism in the economy.

We advise our readers to also watch out for the auto and cement sales numbers expected this week as it will provide valuable insight on their next quarter’s expected performance.

In conclusion, we at DSIJ expect the markets to remain volatile for the day tracking cues from the global markets. Nevertheless we shall update our readers on a timely basis on the expected direction of the markets.

Corporate News

In what may seem as another major blow for Mukesh Ambani led RIL, studies conducted by the company so far reveal that the decline in gas output from Dhirubhai-1 and 3 fields in its KG-D6 block could be ‘irreversible'. These fields have seen a drop of almost 42 per cent since the peak of 60 mmscmd in end-2009.This means industries buying D6 gas will now have to depend on expensive imported gas. While imported gas is available at USD 8.5/mBtu and USD 14/mBtu (excluding other levies and taxes), D6 gas is available at USD 4.2/mBtu (excluding the levies and taxes). However the company has also indicated that it will propose to develop a few satellite fields to cope up with the shortfall.

JSW Steel may get the final go ahead from West Bengal government for its proposed green-field integrated steel project at Salboni in West Bengal, in a week's time. The company has already promised to achieve financial closure for 3 million tonne plant coupled with 300 MW captive power unit in phase-I, soon after receiving the approval from the State Government.

NMDC is looking to buy 2-3 properties overseas by year-end, and is likely to put a bid for acquiring 100 per cent stake in Russia’s Vincy Coal in two or three days. Bid for Vincy Coal, which is estimated to have coking coal reserves of 70-100 million tonnes, will be submitted shortly by NMDC, according to sources.

Drug firm Elder Pharmaceuticals has announced its plans to foray into the growing personal and lifestyle healthcare sector including hypertension, diabetes and cardiac care. Currently, Elder’s main strength is marketing the women’s healthcare product Shelcal, a calcium supplement to prevent osteoporosis, and its extensions. With its recently added manufacturing plant in New Bombay, it has acquired a strong presence in women’s healthcare, nutraceuticals, anti-infectives, lifestyle diseases and pain management.

INDIAN Overseas Bank (IOB) has planned a major global expansion initiative. The government-owned bank, with its head office in this city, has identified 14 centers in the US, Australia and African countries to establish its presence, according to company officials. The bank plans to set up around six branches — two in the US, one in Australia, one in New Zealand and two in Africa.  According to a preliminary feasibility survey conducted by global consulting firm Deloitte & Touche the project would be implemented in three phases.

IT firm NIIT Technologies will invest up to Rs 175 crore for the second phase of expansion of its campus in Greater Noida. According to company, the phase-II expansion will begin in January next year and will have an investment of Rs 165-175 crore. It will take six-eight months to get completed and would create a capacity of 4,000 people.

United Breweries has said its wine sales in the past six months had grown 72-80 per cent and it was planning to launch new brands in the next three-four months. According to a company spokesperson, the wine market in the country is estimated to be growing at 40 per cent per annum and the company is mainly focusing on its Four Seasons brand for wines.
 
Private sector lender Kotak Mahindra Bank has increased its savings deposit rates by 150-200 basis points within a week after the RBI deregulated the interest rate on savings bank deposits. The Mumbai-based lender will offer six per cent on savings deposits above Rs100000 with effect from November 1. For savings deposits up to Rs 100,000, the lender will pay 5.5 per cent interest. The move is aimed to strengthen the bank’s low-cost retail deposit base.

Corporate Actions