Markets May Open In Red

The Indian markets may open negative in line with the global cues. The SGX Nifty is trading down by 28.5 points at 5,186.50, indicating a gap down opening to the markets today.

Last week the markets had a series of disappointing trading sessions to close the week with a slide of more than 2 per cent. This was due to Infosys which posted subdued growth guidance for FY13 while its March quarter numbers were lower than what had been expected by the street. Also, the revised IIP numbers for January 2012 from 6.8 per cent to 1.1 per cent raised concerns about the economy which is now being seen as growing at a very slow pace. The other global markets like the U.S and Europe too were under pressure and closed in the negative territory, as economic reports in China and the U.S missed the estimates. Further, there still are concerns about the European debt crisis.

The rupee has shown some signs of nervousness in the past and it is now trading at 51.4175 against the U.S dollar. The fear of further rupee depreciation from here on is higher as the crude prices are at a level above the normal. Brent crude is currently trading at USD 121.48 a barrel. This may create a negative impact on the markets. Along with this, the results’ season has already started and hence the market may witness some volatility going ahead. One could keep a track on stocks like Crisil, Castrol India, Jay Bharat Maruti, Mindtree, etc which are going to post their March quarter results today.

The wholesale price index (WPI) for March is going to be released today at 11 am and this may have an effect on the market. The data released will also be keenly watched by the market experts as if the inflation numbers come in on the lower side, this may further result into action from the RBI on Tuesday, April 17 in terms of cutting the interest rate. However, we believe that the possibility of this taking place is low. Nevertheless, we will be updating our investors about it through our website under the Mindshare column.

In conclusion, for today we expect the markets to remain volatile as there could be some buying in the beaten down stocks. However, the inflation numbers might drag the market southwards. Hence one has to take a cautious approach while investing in the markets.

Stocks In Action

According to media reports, oil firms have reduced the jet fuel price by Rs 170 per litre or 0.25 per cent to Rs 67,631 which to some extent would benefit the aviation players. Jet fuel accounts approximately for more than 40 per cent of the operating cost and hence there would be some ease on their margins going ahead. Aviation stocks of Kingfisher Airlines, Jet Airways, etc may see an upward movement in the initial trading sessions.

According to Economic Times, the Piramal Group is likely to buy European Drug Company for USD 50 to 100 million as the company focuses on research and development activity. The unidentified firm will help the group do basic research in collaboration with universities and public institutes. A formal announcement to the exchange is expected today from the group and hence one may see some price movement in Piramal Healthcare.

Linc Pens & Plastics plans to set up a manufacturing facility in Gujarat with an investment of Rs 25 crore. The company will begin construction of the plant and will probably start operations from the next fiscal. With expansion plans on the radar the company is set to grow going ahead and therefore in today’s trading session one may see some upward movement in the scrip.

Tata Steel plans to invest around USD 1.3 billion in its existing facilities in Wales over the next five years. The company has a number of facilities in Wales and is yet to specify which would receive the investments. The stock could see some movement in today’s trading sessions.

One of India’s largest car makers, Maruti Suzuki, has received an overwhelming response from its consumers. Its first global compact multi-purpose vehicle Ertiga has received around 400 bookings from Maharashtra on the first day of its launch. The positive effect of the news would be seen in today’s scrip movement which may inch higher.

NTPC’s sixth unit bunker, which is located in Bhagalpur district, collapsed yesterday. This will result in a pause in power generation from the unit which has a capacity of around 500 MW. The stock will react negatively due to this news.

Jubilant Life Science expects to generate additional revenue of around Rs 1,000 crore from exports in the coming years when its new facilities at SEZ in Gujarat will reach full capacity. For FY11 its revenue from exports stood at Rs 1,135 crore. With this the revenue growth would be almost doubled in the coming years – a positive factor for the company. Today the scrip may move northwards.