Markets May Open Sideways As Investors Grapple For Concrete Direction

Opening Bias

The Indian equity markets may open sideways as investors and traders fret over the sustainability of gains seen last Friday. The SGX Nifty is trading down by 8 point at 5,321, indicating a very flattish gap down opening to the markets today.

Auto maker Mahindra & Mahindra reported 25 per cent increase in sales at 47,001 units in March 2012 as against 37,522 units in the same month in 2011, registering its highest ever monthly sales number in the history of the company. In the domestic market, the company registered a 25 per cent rise in sales to 44,342 units compared to 35,488 units in the year-ago period. M&M’s exports jumped to 2,659 units during the month from 2,034 units in March 2011. The company has closed FY2011-12 with sales figure of 4,83,246 units as against 3,77,063 units in FY2010-11, reflecting an impressive growth of 28 per cent. The company’s exports have also grown by an impressive 70 per cent during FY12. Expect positive action.

According to Business Standard, the Delhi High Court has dismissed the plea of two Australian coal firms, Vale Australia (Vale) and AMCI, against an International Court of Arbitration’s (ICA) order to them for payment of about USD 159 million (Rs 760 crore) as damages to SAIL. The dispute between the parties arose when Vale and AMCI failed to meet SAIL’s demand of one million metric tonnes (MT) of coking coal in 2007 under a long-term agreement (LTA) of April 23, 2007 between them. The matter was presented for dispute resolution in March 2009 before the ICA, which agreed with SAIL’s contention that there was a breach of the LTA by the two Australian companies.

According to Economic Times, in a first instance of the government allowing an actual user from the private sector to import gold directly, Tata Group firm Titan Industries has been given the nod to bring the yellow metal from the overseas market. At present, only authorised agencies and public sector units like MMTC are allowed to import gold. This will open the doors for other actual users from the private sector to import gold directly through an approved route. According to the company’s management, the direct import of gold would help in saving 1 per cent of their operating cost besides ensuring the quality of gold.

According to our sources, the domestic refiners have pushed for a hike of at least Rs 3 per litre in the price of petrol from April 1 to cover part of the spike in the cost of raw material. The oil marketers are currently losing Rs 6.43 per litre on petrol and after adding 20 per cent sales tax, the desired increase in rates in Delhi is Rs 7.72 per litre. However, while it is difficult to raise rates by Rs 7.72 per litre in one go, the more feasible option would be an increase of Rs 3 or even Rs 4 a litre. Expect some positive action in the shares of IOC, BPCL and HPCL.

According to a press statement, Ranbaxy Laboratories has received approval from Health Canada to manufacture and market its generic RAN-Rosuvastatin tablets used for lowering cholesterol in the Canadian market. The RAN-Rosuvastatin tablets are a generic version of Astra Zeneca's Crestor tablets. Expect positive action.

Expect some positive action in the scrip of Eros International as the company on Friday said it is planning an initial public offering in the US to raise up to USD 250 million to fund co-productions and acquisitions. The company plans to list its shares on the New York Stock Exchange (NYSE), while at the same time intends to delist from the London Stock Exchange. The LSE-listed firm has appointed Deutsche Bank Securities Inc, BofA Merrill Lynch, Citigroup and UBS Securities LLC as joint book-runners for the IPO.

Corporate Action