Markets may open on a subdued & negative note

Morning Update 08th Dec 2011

Opening Bias

The markets may open on a subdued and negative note today ahead of the WPI food, fuel and primary articles inflation expected today. The SGX Nifty is trading down by 6 points at 5060, indicating a gap down opening to the markets today.

Back home, in order to break the logjam in the parliament and ensure smooth running of the proceedings, the UPA government. has decided to put on hold the cabinet decision to allow up to 51 per cent FDI in multi-brand retail. However, the government will go ahead with the proposal to allow 100 per cent FDI in single brand retail.

In other developments, Prime Minister Manmohan Singh has assured the telecom operators that the government would look into their concerns and formulate forward-looking policies to sustain growth in the sector. In conclusion, for today we expect the markets to remain volatile. We advise our readers to stay cautious and stick to cheaply available large-cap bets as they are more likely to see some positive movements.

Stocks In Action

According to a BSE press release, Larsen & Toubro Construction (L&T) has bagged new orders worth Rs 2,700 crore across various businesses in the last two months. The buildings and factories segment secured orders worth Rs 1,109 crore for construction of residential complex and a warehouse. The infrastructure division secured orders worth Rs 353 crore for the construction of viaduct and two station buildings of Kolkata Metro. The power transmission division has bagged orders worth Rs 763 crore for construction of transmission lines and substation. In addition it has got an order of Rs 272 crore for rehabilitation of the water treatment plant of Delhi Jal Board. With large infrastructure projects being put on hold and several customers deferring orders, this is a positive development for the company.

Coal India (CIL) has lowered its production target for the ongoing financial year to at least 440 MT from the estimate of 452 MT in its annual plan citing various reasons like heavy rainfall, strike and delays in the grant of forestry and environmental clearances to coal projects. The public sector firm also said it was planning to mine between 556 and 615 MT of coal in the terminal year of the 12th Five Year Plan (2012-17). The state-run company missed its April-September target by about 20 MT, recording an output of 176 MT against the target of 196 MT, which it has blamed on inclement weather, including heavy rains in August-September that affected production in almost all its collieries.

According to a statement issued on BSE, Gujarat Fluoro chemicals (GFL) has entered into a joint venture agreement with Gujarat Mineral Development Corporation (GMDC) and Navin Fluorine International (NFIL) to undertake a fluorspar beneficiation project for supply of acid grade fluorspar and metallurgical grade fluorspar to GEL. The joint venture will be in the form a separate company, in which GFL will own 25 per cent equity.

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According to a BSE release, Sesa Goa has acquired 2,43,07,241 equity shares and its subsidiary Sesa Resources acquired 45,00,000 equity shares of Cairn India (CIL) aggregating to approximately 1.5 per cent of the total paid up share capital of CIL from Cairn UK Holdings Limited at an average price of Rs. 325 per share through a block deal on the Bombay Stock Exchange. With this acquisition Sesa Goa along with its subsidiary, Sesa Resources holds 20 0 per cent of the share capital of Cairn India.

IT major Wipro's Chairman Azim Premji has expressed his desire to invest around Rs 700-800 crore to expand its operations in the state West Bengal. According to media reports, it is believed that Wipro would create 15,000 jobs in the new project, which is double the number of those at the company's Salt Lake campus.

According to media reports, Moser Baer Clean Energy, the renewable energy vertical of Moser Baer India, is said to be investing USD 1 billion (Rs 5,100 crore) for setting up solar projects with a cumulative capacity of 300 MW in the country and abroad in the next nine months. These projects would be set up in Gujarat, Orissa, West Bengal and Rajasthan in India, as well as abroad in countries like Germany, Italy and UK. The company also has ambitious plans for augmenting its solar power generation capacity to 1 GW by 2015.