Indian markets may open negative

While food price inflation and manufactured goods’ inflation show signs of easing out, fuel inflation continues to be stubbornly high and shows no trend of abating. Moreover, with talks of a pending hike in retail fuel prices within the next month, we expect the high rate of fuel inflation to continue to pressurize the markets.

However, while taking a leaflet out of the RBI’s recent monetary policy review, we believe that looking at the current state of the economy, the need to infuse growth and expecting inflation to be near the comfort levels, the central bank could cut rates in its March 2012 review.

In conclusion, we expect the markets to remain negative through the first half and pick up vital cues from the European markets during the late noon trades.

Stocks In Action
According to a BSE press release, strong sales at the luxury Jaguar-Land Rover unit helped Tata Motors’ third quarter consolidated net profit jump a better-than-expected 40 per cent year-on-year to Rs 3,405.6 crore, even as forex losses and cost pressures hurt its domestic business. India’s largest commercial vehicle maker’s consolidated revenue in the period of October-December accelerated by 44 per cent from a year ago to Rs 45,260.3 crore, helped by a strong demand for its vehicles. The pick-up in domestic passenger vehicle sales led by Nano also boosted earnings. Analysts, on an average, had expected Tata Motors’ third quarter consolidated net profit at Rs 2,500 crore on revenue of Rs 43,365 crore. Its consolidated EBITDA margin was up by 70 bps to 16 per cent in the three-month period.

According to sources, Reliance Industries’ KG-D6 fields may see production further drop to an all-time low of about 27 million cubic meters a day by April/May due to the increased entry of sand or water in the wells. This will be the lowest production level since RIL began output from the KG-D6 block in April 2009. The Dhirubhai-1 and 3 (D1 and D3) gas fields in the KG-D6 block and the MA oilfield in the same area produced about 30 mmcmd on debut and reached 61.5 mmcmd in March 2010 before water and sand ingress gradually brought down the output. Today, D1&D3 are producing about 27.5 mmcmd with MA another 7 mmcmd. We expect negative action in the counter today.

According to a filing to the exchanges, education services company Everonn has reported a net loss of Rs 6.54 crore for the third quarter ending December 31, 2011. The Mumbai-based company reported a net profit of Rs 21.62 crore during the same period of the previous year. The total income of the company for the third quarter ending December 31, 2011 stood at Rs 88.27 crore as against Rs 85.70 crore registered during the same period of the previous year.

According to Economic Times, Lanco Infratech plans to raise up to Rs 3,700 crore by selling a minor stake in its power business in the next five months. The company currently has generation capacity of 4,390 MW and has 93 per cent of its revenues contributed from the EPC and power business. The company reported a 63 per cent dip in its consolidated net profit for the third quarter ended December, 2011 at Rs 60.92 crore on account of higher outgo on raw material and interest expenses.