Indian Markets May Give Up Gains, Open Negative

DSIJ Intelligence / 04 Apr 2012

Indian equity markets may cut back on its gains and open negative. The SGX Nifty is trading down by 14 points at 5366 indicating a gap down opening to markets today.

Opening Bias

The Indian equity markets may cut back on the gains and open negative. The SGX Nifty is trading down by 14 points at 5,366, indicating a gap down opening to the markets today.

Benchmark Indices

Index

Closing

% Change

SENSEX

17597.42

0.68

NIFTY

5358.50

0.76

Dow Jones

13199.55

-0.49

S&P 500

1413.38

-0.40

NASDAQ

3113.57

-0.20

Bovespa

64284.26

-1.43

FTSE

5838.34

-0.62

DAX

6982.28

-1.05

CAC

3406.78

-1.62

LIVE

Hang Seng

20790.98

0.00

Nikkei

9919.36

-1.30

Shanghai

2262.79

0.00


Overnight, the US stocks fell after notings from the Federal Reserve’s latest policy meeting damped expectations for more monetary stimulus. The Asian shares have also come under some selling pressure during the early trading hours, with metal firms taking a hit across the region after commodity prices fall on the fading likelihood of more US monetary easing.

Currency Rates

Particulars

Rs/$

Rs/Euro

Rs/GBP

Rs100/JYP

RBI Rate

50.5645

67.4854

81.0498

61.6300

Future

50.9900

67.8500

81.4825

62.1100


Back home, the negative sentiments from the Federal Reserve meet would affect the Indian markets too, especially the energy and metal stocks, which are primarily driven by their international commodity prices. Among other major developments, according to media reports, SEBI has indicated that the Bombay Stock Exchange may list its shares on the exchange platform soon for public trading. This news has come soon after SEBI cleared the decks for listing of bourses in the capital markets.

Key Global Indicators

Particulars

Gold (Rs/10gm)

Crude ($/bbl)

Spot

27577

124.54

% change

-

-0.35

Future

27925

103.71

% change

-0.53

-0.29


Based on a price of Rs 375 per share (value derived from 1 per cent stake bought by HDFC Bank in June 2011), the PE multiple of BSE stands at 24.03x the annualized EPS of Rs 15.6. This works out to be expensive when compared to the PE that the recently listed MCX is commanding at 22x its annualized EPS of Rs 57.67. However, one has to take a closer look at the market cap and volumes traded on the two exchanges to get a more fair idea. We shall update readers on this as and when the announcements are officially made.

In conclusion, for today we see the markets remaining volatile with a negative bias. We reiterate our stance that with the March quarter results’ season approaching soon it is better to stick to individual stocks rather than go bullish on any particulars sector. With a long weekend ahead we wish all our readers a happy holiday.

Stocks In Action

According to a press release on the BSE, BHEL announced its flash results for FY12 wherein it has reported net sales of Rs 49,301 crore, up by 14 per cent from its FY11 figure of Rs 4,337 crore. The profit before tax grew by 11 per cent to Rs 10,001 crore from Rs 9,006 crore in a year-ago period. Even though the margins have not been disclosed, we at DSIJ believe that there is a fall in the EBITDA margins. The net profit for the fiscal stood at Rs 6,868 crore compared to Rs 6,011 crore in FY10. Although the net profit has been in line with topline growth, the order inflow in FY12 has declined by 63 per cent to Rs 22,096 crore on a YOY basis.

According to sources, as per a presidential directive from the Government of India, Coal India has been ordered to sign fuel supply pacts with power producers at the 80 per cent trigger level. This development would come as a positive factor for power companies like Reliance Power, Tata Power and Torrent Power, among others.

According to press release on the BSE, Glenmark Generics Inc USA, a subsidiary of Glenmark Pharma, has been granted final approval for their abbreviated new drug application (ANDA) by the United States Food and Drug Administration (USFDA) for Desogestrel and Ethinyl Estradiol tablets. The company will market their approved product as Viorele TM Tablets and plans to commence shipping immediately. Viorele TM tablets are a generic version of Teva Women’s Health Inc.’s Mircette tablets. According to IMS Health, for the 12-month period ending December 2011, the total market sales achieved for Desogestrel and Ethinyl Estradiol tablets USP 0.15 mg/0.02 mg and Ethinyl Estradiol Tablets USP 0.01 mg were approximately USD 98 million. The company’s current portfolio consists of 78 generic products authorised for distribution in the US market and 40 ANDAs pending approval with the USFDA.

According to a press release on the exchanges, Cairn India has made an oil discovery in a Krishna Godavari basin block, the second find in the onland block. Cairn Energy India, a wholly-owned subsidiary of Cairn India Ltd, has notified the management committee of an oil discovery in the Nagayalanka-SE-1 well, in the onshore block KG-ONN-2003/1 in the Krishna-Godavari Basin on the east coast of India. CEIL is the operator of the block with 24 per cent stake while Cairn India holds 25 per cent. The remaining 51 per cent is with state-owned ONGC. Sans providing information about the reserves that this discovery may hold, Cairn said that a gross 57 metre hydrocarbon column was tested as oil-bearing. It flowed 70 barrels per day of oil and 0.6 million standard cubic feet per day of gas during testing.  

Expect some positive action in urea fertiliser stocks like Chambal Fertilizer, RCF, NFL and Zuari, among others as Economic Times has reported that the fertiliser ministry is mooting the idea of increasing retail urea price by 10 per cent in order to reduce the subsidy burden on the government. It plans to increase prices from Rs 5,310 per tonne to Rs 5,841 per tonne, which will translate into a subsidy bill reduction to the tune of Rs 2,000 crore based on the current urea volumes.

Corporate Action

Stocks Paying Dividend (Ex-Date)

Scrip Name

Action

Rs

Goodricke Group

Dividend

4.00

SKF India

Dividend

7.50


BSE Institutional Turnover

 

 FII

 DII

Trade Date

 Buy

 Sales

 Net

 Buy

 Sales

 Net

3-Apr-12

1,995.03

1,662.56

332.47

1,096.77

896.49

200.28

2-Apr-12

1,861.47

1,615.53

245.94

770.91

843.72

-72.81

30-Mar-12

5,112.70

4,150.05

962.65

1,096.07

1,263.39

-167.32

April , 12

3,856.50

3,278.09

578.41

1,867.68

1,740.21

127.47


FII DERIVATIVES STATISTICS FOR 03-April-2012

 

Buy

Sell

OI (End of day)

Net Position

Particulars

Rs (crore)

Rs (crore)

No. of contracts

Rs (crore)

Rs (crore)

Index Futures

1585.92

1044.82

355451

9530.65

541.10

Index Options

9191.22

8942.38

1086666

29112.18

248.84

Stock Futures

1007.82

882.53

788580

22630.06

125.29

Stock Options

350.29

334.02

20322

594.02

16.27

Total

12135.26

11203.76

2251019

61866.91

931.49

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