Markets may witness a negative opening

Overnight the US markets were shut for trading as they celebrated the ‘Thanksgiving Day’. The European markets ended marginally lower, as ratings agency Fitch cut Portugal’s debt rating to junk class.

The Asian markets were also seen trading a little flatly - though in the red zone – during the early morning trades, with energy and banking stocks amongst the notable decliners.

As US celebrated the ‘Thanksgiving Day’, the Indian companies’ ADRs weren’t traded on the American bourses yesterday.

Back home, the November 12, 2011 inflation numbers were announced yesterday and the markets cheered these numbers as food inflation eased to 9.08 per cent as against 10.63 per cent in the previous week. After remaining in the double digits for the past five weeks and touching a high of 12.21 per cent, the rate of price in food articles has finally managed to come back in the single digit zone, raising some hope that the RBI might take a pause in its monetary policy review scheduled in December 2011.

In others, inflation in the primary articles’ group also fell to 9.08 per cent in the week under review, from 10.39 per cent in the previous week. This stood at a whooping 15.18 per cent last year same week. Inflation in the fuel and power group remained unchanged at 15.49 per cent. Inflation in the non-food articles space slid to 4.05 per cent from 5.33 per cent in the previous week, which stood at 23.64 per cent in the same period a year earlier.

In other developments, yesterday we had reported that the government is considering allowing FDI in the retail sector and rightly so, though amidst strong opposition, the cabinet has passed a resolution to allow FDI investments of up to 51 per cent in multi-brand and 100 per cent in single-brand retails. This is very positive news for the likes of Pantaloon, Trent, CESC, Bharti, etc who have show keen interest in bringing foreign investments into this growing sector.

In conclusion, despite a few positive news flows that are cheering the markets forward we still expect the markets to remain largely volatile due to the larger concerns of a weak rupee and an unstable Euro zone crisis still hanging over us. We advise our readers to stay cautious.

Stocks In Action

There seems to be no respite for the oil marketing companies (OMCs) and the aviation sector as recent developments have brought to light that Jet Airways has an unpaid jet fuel bills balance which has risen by over 65 per cent to Rs 849 crore in the first six months of the financial year 2011-12 as against Rs 514.68 crore outstanding as of March 31, 2011. At the same time the dues of Kingfisher Airlines have grown by a less alarming rate of 4 per cent during the same period but are at a whopping Rs 636.79 crore. As for the OMCs, the total exposure to outstanding dues from airlines stands at Rs 1,639.38 crore as of September 30, 2011, up by 28 per cent from Rs 1,279.9 crore at the end of the 2010-11 fiscal.

By giving the loan borrowers something to cheer about, SBI has decided to do away with its pre-payment charges of 2 per cent on home loans. It is believed that this will also prompt the other banks to waive off such charges.

Jindal Saw has bagged orders worth USD 190 million (around Rs 1,000 crore) to supply large-diameter pipes and ductile iron pipes for various export markets. With the receipt of this new order, the total order book of the company now stands at USD 885 million dollars.

Corporate Action