Markets May Open Negative In Line With Global Cues And Ahead Of Expiry

Indian markets may open negative in line with global cues and ahead of the expiry of March F&O series. The SGX Nifty is trading down by 12.50 points at 5248.50 indicating a gap down opening to markets today.

Markets may open on a negative note after yesterday’s gain. Broader market yesterday was up more than a per cent as Tax fears on P- note recede. Overnight US market closed down marginally as the street offered muted reaction to the economic data like consumer confidence Index and also on the home price data.  European markets yesterday closed lower with FTSE and CAC down 0.56 and 0.92 per cent while CAC closed marginally in the red zone. Today Asian markets have opened in the negative zone taking the cues from the developed markets, with Nikkei being the major loser trading down almost a per cent.

Going forward, the outlook for Indian equities this week is very volatile. Also with the March F&O contracts expiring this week on Thursday, market volatility could be higher as traders roll over positions to the April series. Investors and traders on the street are expected to carry forward their short positions to April in view of the bearish market sentiments.

Rupee has shown some signs of nervousness in the past, and it is now trading at 50.9083 against US dollar. The fears of further Rupee depreciation from here on are higher as the crude prices are at the higher level. Brent crude is currently trading at 125.16 USD a barrel.

The government will borrow Rs 3.7 lakh crore from the market which is 65 per cent of the planned annual borrowing in the first half of FY13 versus the street expectation of 60 per cent. Bond yield today could move northwards which will further result very less chance for RBI to cut the rate in the next monetary policy which is scheduled on 17th April 2012.

In conclusion, for today we expect markets volatile, one has to take a cautious approach while investing in the markets.

Stocks In Action

L&T Finance a subsidiary of L&T Finance holdings has acquired Fidelity’s Indian mutual fund business.  Management sees tremendous complementary strengths between both the mutual funds. The size of the combined entity, i.e. average AUM would be Rs 13497 crore for the quarter ended December 2011, with a market share of 2 per cent.  The stock may see an upward move in today’s session.

GAIL India, targets for over 85 mmscmd gas marketing and 121 mmscmd gas transmission in FY13 under annual Memorandum of understanding signed with Ministry of petroleum and natural gas. The stock may see a upward movement in today’s trade.

Inventure Growth and securities, yesterday closed higher 14  per cent and the stock may see movement in today’s trade on the back of news that the board of directors to consider special interim dividend and issuance of bonus share in the meeting which is scheduled on 4th April 2012.

According to Economic Times, Kingfisher Airlines has shut 28 of its 56 flight destinations over the past two days, and tells 40 per cent of its staff to stay at home. The stock is in pressure since last couple of months and it seems that the promoter is not finding a clear way for its cash trapped Airlines. We believe the stock may move downwards on the back of this news.

Tata Steel may borrow up to Rs 50000 crore for capex expansion.  The steel major seeks to expand capacity at Jamshedpur to 10 million tonnes, build new steel plant at Kalinganagar and also make global investments in raw material projects. The stock could see a up move in early trades.

Godrej Properties has set as issue price of Rs 575 per share which was the lower band for its 81.86 lakh share institutional placement. The share yesterday closed 2 per cent lower to Rs 623, and the stock might take a further beating in today’s trade also.NBCC IPO which closed yesterday was oversubscribed 4.93 times. Qualified Institutional buyer’s portion was subscribed the most around 7.07 times while Non Institutional Investors was subscribed 1.7 times while Retail Individual Investors portion was subscribed 3.4 times. Employee reservation received a poor response and was subscribed only 0.09 times. While the other IPO named MT Educare was subscribed 0.65 times on its first day of offer.