Indian markets may open negative

DSIJ Intelligence / 27 Jan 2012

Overnight, US stocks gave up its initial gains to end sideways, after a dismal housing data overshadowed positive cues from Fed's decision to keep interest rate near zero through late 2014.

Morning Update 27th Jan12

Opening Bias

The Indian markets are likely to open on a negative note. The SGX Nifty is trading down by 27 points at 5,215, indicating a gap down opening to the markets today.

Benchmark Indices

Index Closing % Change
SENSEX 17077.18 0.48
NIFTY 5158.30 0.60
Dow Jones 12734.6 -0.18
S&P 500 1318.43 -0.57
NASDAQ 2805.28 -0.46
Bovespa 62953.10 0.75
FTSE 5795.20 1.26
DAX 6539.85 1.84
CAC 3363.23 1.53
LIVE
Hang Seng 20483.07 0.21
Nikkei 8845.23 -0.05
Shanghai 2319.12 0.00

Overnight, after flagging the day off on a positive note thanks to the Federal Reserve’s decision to keep the interest rates low through late 2014 and a round of better-than-expected earnings from companies such as Caterpillar along with the economic reports that had jobless claims remaining under 4,00,000, the US stocks ended marginally negative after new-home sales unexpectedly declined last month, marking the slowest year for builders since the government began tracking the data.

The European stocks however ended their day on a strong and positive note tracking positive cues from the Fed’s decision to keep the interest rates low. The Asian shares are seen trading on a flat and mixed note, tracking subdued cues from the US where the housing data overshadowed the positive impetus of the Fed’s decision to keep the rate low through late 2014.

Currency Rates

  Rs/$ Rs/Euro Rs/GBP Rs100/JYP
RBI Rate 50.0215 65.1255 78.0535 64.1900
Future 50.1525 65.0600 78.1925 64.1650

Back home, according to certain media reports, it has emerged that the government has approved disinvestment of 10 per cent of its stake in Rashtriya Ispat Nigam Ltd (RINL) through an IPO, a move that could fetch about Rs 2,500 crore to the exchequer in the next fiscal. Earlier the IPO was scheduled for the January-March quarter of the current fiscal but had to be postponed because of poor stock market conditions.


Now with the markets showing signs of improvement and the economy on a whole inching its way back to recovery, one may expect the government to step up its process to meet its disinvestment plans. Good macro economic and market conditions may also make way for other PSU FPO and IPO offers which were shelved last year. Among these are the two big FPOs of ONGC and SAIL. We expect some positive action in most of the PSU packs today on the back of expectations of a probable disinvestment in them.  

Key Global Indicators

  Gold (Rs/10gm) Crude ($/bbl)
Spot 26740 110.36
% change - 0.08
Future 27630 99.86
% change 0.90 0.16

In conclusion, we expect the markets to remain negative for the major part of the day. 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 Business Standard, state-owned power producer NTPC has got a Ministry of Environment and Forests’ (MoEF) clearance for its 2,400 MW (3x800 MW), Stage-I Kudgi Super Thermal Power Project being set up in the Bijapur district of adjoining Karnataka. The board of directors has recently cleared the investment proposal of Rs 15,166 crore for setting up the project. The company is expected to start work at the plant site any time soon. The NTPC has sourced the 800 MW units through a bulk tendering process. This is a positive development for the company and we expect some positive action on the bourses today. 

According to a BSE press release, Vedanta Group firm Sesa Goa reported a decline of over 35 per cent in its consolidated profit at Rs 691.52 crore for the quarter ended December 31, 2011 due to a slew of reasons, including higher export duty and losses incurred on foreign currency borrowings. The company had reported a profit of Rs 1,065.29 crore during the corresponding quarter of 2010-11. Its net sales, however, recorded a growth of 16.32 per cent at Rs 2,617.08 crore during the quarter under review vis-a-vis Rs 2,249.99 crore in the same period of FY11. During the quarter, Sesa Goa had to pay an export duty of Rs 448.48 crore, a rise of over 284 per cent, while costs on raw materials increased by 96.67 per cent to Rs 179.56 crore. The mark to market losses on foreign currency borrowings were at Rs 177.93 crore, while the interest payments rose by 445 per cent to Rs 72.98 crore.

According to a BSE press release, Deepak Fertilizers and Petrochemicals Corporation today said that its net profit has increased by 23 per cent to Rs 49.65 crore in the quarter ended December 31, 2011 as against Rs 40.26 crore for the year-ago period. But the profitability was affected by a weak rupee to the extent of Rs 22 crore. The total income of the company grew by 60 per cent to Rs 601.49 crore in the third quarter of the current fiscal from Rs 375.03 crore in the same quarter of the previous fiscal. The rise in income was driven by the strong increase in both self-manufactured fertilisers and chemicals. 

According to Business Standard, Dr Reddy’s Laboratories has run into trouble with the US health authorities for not highlighting important risk information on a promotional website for injectable generic fondaprinux sodium, a drug that it launched in the US market recently. Consequently, we expect some negative action in the scrip today.

According to the Hindu Business Line, the US Justice Department has sought a permanent injunction against Ranbaxy, a move that will require the Indian pharmaceutical major to make fundamental changes to its plants both in the US and India and would prevent it from manufacturing drugs at certain facilities in the US. The Justice Department has cited violations of manufacturing standards and problems with submitted data in a consent decree for permanent injunction filed in court against the company. The consent decree comes after the US regulator banned the company in 2008 from importing more than 30 of its generic drugs because of violations of manufacturing practices at two plants — at Dewas and Paonta Sahib. Expect some negative action in the scrip of Ranbaxy today.

Corporate Action

Corp Action

Scrip Name Action Ratio
ADCINDIA Dividend 1.50
Gandhi Spec-$ Interim Dividend 6.00
Shree Cement Interim Dividend 6
Torrent Pharma Interim Dividend 6

Results Today

Scrip Name Action Scrip Name Action Scrip Name Action
ABC Bearings-$ Q3FY12 Kriti Inds-$ Q3FY12 Tata Sponge Q3FY12
Atul Q3FY12 Lanco Inds Q3FY12 Timex Group-$ Q3FY12
Bank of India Q3FY12 Mafatlal Inds-$ Q3FY12 Venus Remedies Q3FY12
Bharat Elect Q3FY12 NHPC Q3FY12 Wyeth Q3FY12
BHEL Q3FY12 NTPC Q3FY12
Blue Star Q3FY12 Petronet LNG Q3FY12
Canara Bank Q3FY12 Pfizer Q3FY12
Gujarat Alk Q3FY12 Rane Madras Q3FY12
Gujarat State Fert Q3FY12 Redington India Q3FY12
Hindusthan Nat-$ Q3FY12 Shanthi Gears Q3FY12
Jyoti Struc Q3FY12 Sundaram Fin Q3FY12
Karur Vysya Bank Q3FY12 Swaraj Engines Q3FY12

BSE Institutional Turnover

 

 FII

 DII

Trade Date  Buy  Sales  Net  Buy  Sales  Net
25-Jan-12 3,920.65 2,773.64 1,147.01 1,162.31 1,874.31 -712.00
24-Jan-12 3,011.11 2,209.82 801.29 1,391.98 1,654.63 -262.65
23-Jan-12 1,579.16 1,637.96 -58.80 873.05 1,311.53 -438.48
Jan , 12 42,776.90 34,998.96 7,777.94 17,220.13 22,472.63 -5,252.50

FII DERIVATIVES STATISTICS FOR 25-Jan-2012

 

Buy

Sell

OI (End of day)

Net Position

  Rs (crore) Rs (crore) No. of contracts Rs (crore) Rs (crore)
Index Futures 3122.87 3137.51 464744 11979.65 -14.64
Index Options 15981.92 15115.36 1012114 26090.52 866.56
Stock Futures 6570.20 6373.75 948721 25755.34 196.45
Stock Options 494.63 529.54 10602 287.36 -34.90
Total 26169.63 25156.16 2436181 64112.87 1013.47

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