Indian Markets May Open Negative Post Assembly Election Results
DSIJ Intelligence / 07 Mar 2012
Indian markets may open negative in the aftermath of a dismal performance by Congress at the recently concluded UP elections. The SGX Nifty is trading down by 28 points at 5192 indicating a gap down opening to markets today.
| Benchmark Indices | ||
|---|---|---|
| Index | Closing | % Change |
| SENSEX | 17173.29 | -1.09 |
| NIFTY | 5222.40 | -1.10 |
| Dow Jones | 12759.15 | -1.57 |
| S&P 500 | 1343.36 | -1.54 |
| NASDAQ | 2910.32 | -1.36 |
| Bovespa | 65114.10 | -2.76 |
| FTSE | 5765.80 | -1.86 |
| DAX | 6633.11 | -3.40 |
| CAC | 3362.56 | -3.58 |
| LIVE | ||
| Hang Seng | 20560.7 | -1.18 |
| Nikkei | 9573.56 | -0.66 |
| Shanghai | 2397.02 | -0.56 |
In what may seem as a major blow to the UPA II government, the SP has won the much coveted Uttar Pradesh elections by a landslide margin. As per the final figures SP has won 224 votes, Mayawati led BSP won 80 votes, while the country’s two national parties BJP and Congress won 47 and 37 votes respectively. Experts feel that this loss coupled with the dismal performance in other states of Goa and Punjab, would further weaken the Congress’s political prowess and severely hamper the reforms process. The upcoming budget may too end up being a political coup aimed at salvaging the UPA govt. position at the center.
| Key Global Indicators | ||
|---|---|---|
|
| Gold (Rs/10gm) | Crude ($/bbl) |
| Spot | 27279 | 122.15 |
| % change | - | 0.14 |
| Future | 27882 | 105.09 |
| % change | -0.24 | 0.38 |
Now with the elections behind us, traders and investors on Dalal Street would turn their attention towards key events like the IIP’s and inflation for the month of Jan 2012, followed by RBI’s all-important monetary policy review and finally the union budget 2012-13. To read further on the upcoming events and its effect on the markets kindly refer to our article (Title: - Major Events Lined Up, Markets To Be Circumspect – dated 3rd March 2012).
Negative sentiments seem to be flowing in from the global front as well. U.S. stocks tanked heavily last night as fears re-emerged about a possible Greek bond default. European stocks also closed lower, adding to losses after Reuters reported that the Institute of International Finance, a trade group that helped negotiate the terms of Greece’s bond swap with its private-sector holders, had warned in a recent memo that a disorderly default could cause more than 1 trillion euros ($1.3 trillion) in damage to the euro zone. Consequently the Asian markets have also slid downwards in early trades tracking sharp cues for the overseas counterparts.
| Currency Rates | ||||
|---|---|---|---|---|
|
| Rs/$ | Rs/Euro | Rs/GBP | Rs100/JYP |
| RBI Rate | 50.0265 | 66.0203 | 79.3170 | 61.3900 |
| Future | 50.6600 | 66.5300 | 79.7975 | 62.4900 |
In conclusion, today the markets would remain negative. Our advice to readers is to adopt the wait and watch strategy ahead of some key events expected next week. These event would turn the markets highly volatile and it’s best not to take any bold positions at such times. For those who wish to play the situation, we recommend the use of F&O strategies.
Stocks In Action
According to Business Standard, RP-Sanjiv Goenka group's flagship company CESC has been allowed an average 13.29% increase in tariff from West Bengal Electricity Regulatory Commission (WBERC), which would result in a gain of Rs 552 crore for the company for 2011-12. The WBERC order gave retrospective effect for the hike from April 2011.
According to Economic Times, Income tax sleuths had raided the office and residential premises of senior executives of Mumbai-based drug firm Elder Pharmaceuticals yesterday. The department suspected that Elder Pharma’s books of accounts were not in order, and there were reasons to suspect that the company’s expenditure had been inflated. Earlier in 2009, a Serious Fraud Investigation Office (SFIO) probe ordered by the ministry of corporate affairs had revealed that company had violated the Companies Act by manipulating its balance sheet, and siphoned off funds. The tax department had also raided the company four years ago based on a tip-off that bogus bills were used to exaggerate expenses. Expect negative action.
Corporate Action
| Stocks Paying Dividend (Ex-Date) | ||
|---|---|---|
| Scrip Name | Action | Rs |
| Bharat Forge | Interim Dividend | 1.50 |
| BSE Institutional Turnover | ||||||
|---|---|---|---|---|---|---|
|
| FII | DII | ||||
| Trade Date | Buy | Sales | Net | Buy | Sales | Net |
| 6-Mar-12 | 2,629.95 | 2,871.17 | -241.22 | 1,238.12 | 1,058.21 | 179.91 |
| 5-Mar-12 | 1,867.04 | 1,741.54 | 125.50 | 827.42 | 1,085.75 | -258.33 |
| 3-Mar-12 | 13.87 | 23.37 | -9.50 | 5.46 | 10.33 | -4.86 |
| Mar , 12 | 9,039.07 | 8,712.16 | 326.91 | 4,063.82 | 4,227.56 | -163.74 |
| FII DERIVATIVES STATISTICS FOR 06-Mar-2012 | |||||
|---|---|---|---|---|---|
|
| Buy | Sell | OI (End of day) | Net Position | |
|
| Rs (crore) | Rs (crore) | No. of contracts | Rs (crore) | Rs (crore) |
| Index Futures | 3196.00 | 3572.40 | 517179 | 13508.27 | -376.40 |
| Index Options | 28043.21 | 28149.18 | 1664031 | 43446.25 | -105.97 |
| Stock Futures | 2903.27 | 2601.30 | 976177 | 27624.23 | 301.97 |
| Stock Options | 1013.29 | 1014.80 | 51273 | 1434.76 | -1.51 |
| Total | 35155.77 | 35337.69 | 3208660 | 86013.52 | -181.92 |
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