Markets May Open In Red, Ahead Of RBI's Meet
DSIJ Intelligence / 17 Apr 2012
| Benchmark Indices | ||
|---|---|---|
| Index | Closing | % Change |
| SENSEX | 17150.95 | 0.33 |
| NIFTY | 5226.20 | 0.36 |
| Dow Jones | 12921.41 | 0.56 |
| S&P 500 | 1370.00 | -0.05 |
| NASDAQ | 2988.40 | -0.75 |
| Bovespa | 61954.55 | -0.24 |
| FTSE | 5666.28 | 0.25 |
| DAX | 6625.19 | 0.63 |
| CAC | 3205.28 | 0.51 |
| .. | ||
| Hang Seng | 20634.86 | 0.12 |
| Nikkei | 9507.69 | 0.39 |
| Shanghai | 2355.82 | -0.05 |
Yesterday the markets closed higher on the back of speculation that the RBI in its monetary meet today will cut the interest rate to fuel growth in the economy. The WPI inflation for March stood at 6.89 per cent while the January data was revised upwards by 34 basis points to 6.89 per cent. Overnight the European markets closed higher as shares of International Power Plc and other power companies moved up on the back of an increase in merger and acquisition activity. The U.S market closed with a mixed bag with Dow closing higher while Nasdaq and S&P closed in the negative territory amid retail sales data of the U.S economy coming in better than street expectations.
| Currency Rates | ||||
|---|---|---|---|---|
|
| Rs/$ | Rs/Euro | Rs/GBP | Rs100/JYP |
| RBI Rate | 51.6590 | 67.1825 | 81.7969 | 64.1700 |
| Future | 51.8200 | 67.4800 | 82.0250 | 64.1600 |
| Key Global Indicators | ||
|---|---|---|
|
| Gold (Rs/10gm) | Crude ($/bbl) |
| Spot | 28414 | 119.08 |
| % change | - | -1.76 |
| Future | 28590 | 102.35 |
| % change | 0.01 | -0.47 |
The rupee has shown some signs of nervousness in the past, which further depreciated yesterday. It is now trading at 51.6590 against the US dollar. Brent crude declined almost by 2 per cent yesterday and closed at USD 119.08 a barrel. The fears of further rupee depreciation from here on are higher as the crude prices are still at a higher level. Along with this, the results’ season has already started and hence the market may see some volatility going ahead. One could keep track of stocks like Goa Carbon, IFCI, Ramsarup Industries, SKF India and VST Industries which are going to post their March quarter results today.
According to a survey conducted by media houses, more than 80 per cent of the respondents expect a rate cut in today’s meet but we would like to take a contrarian view. We feel that the RBI should take another pause before making a reverse move as the economy is still under pressure and the environment of high inflation and high interest rate will continue to be so in the near term. One has to watch out for the RBI monetary meet which is scheduled today since this could have an impact on the markets. We will be updating our readers about the various movements through our Mindshare columns on this website.
In conclusion, for today we expect the markets to be volatile and investors should watch out for guidance and forecast of certain key parameters like credit growth, deposit growth, inflation, etc for FY13 from the RBI’s monetary meet and then take cues from the same. Hence, one has to take a cautious approach while investing in the markets.
Stocks In Action
According to media reports, JSPL is planning to begin its production from the Odisha coal block by August which is estimated to have an approximate reserve of 225 million tonnes. Further, coal produced from the block will be used for DRI - also called sponge iron - at its Angul plant in Odisha. The stock may see a positive movement on the back of this news and also after having been beaten down in the past trading sessions.
Mindtree, an IT firm, posted its March quarter results yesterday post the market hours. The net profit of the company has increased to Rs 69 crore against Rs 32 crore in a similar period last year. The company added 502 people during the fourth quarter, taking its total head strength to around 11,000 as of March 31, 2012. The stock may see an upward movement in today’s trading session.
According to Economic Times, the promoters of Hotel Leela will infuse around Rs 150 crore as a part of a corporate debt restructuring deal which will further raise their stake in the company to 63 per cent from the existing 57 per cent. The deal is expected to happen at the end of the month. This deal was necessary for the company as it has a huge debt of around Rs 4,000 crore in its books that is affecting the bottomline of the company. On the back of this news one may see some stock price movement in today’s trade.
Bharti Airtel, one of the largest telecom players in India, has signed a five-year IT outsourcing deal with Avaya which will manage the IT requirements of Bharti Airtel’s BPO. Avaya will cover around 20 countries and 80 locations. Another piece of news related to the telecom major is that the Income Tax Department has issued a fresh notice to Bharti for its alleged non-payment of TDS dues for its overseas operations. The scrip may thus witness some volatility in today’s trading session.
According to a media report, FMCG major HUL has leased its old headquarters to HDFC for three years. The lease has been priced at an approximate rate of Rs 150 to 200 per sq feet which is below the market rate of around Rs 250 per sq feet. The reports say that HUL is expected to get an annualized return of around Rs 300 to Rs 350 crore. One has to watch out for the movement of both these stocks in today’s session.
Yesterday, Merrill Lynch Capital Market bought around 2.13 million shares of IVRCL for Rs 15 crore (which works out to around Rs 70 per share) through open market transactions. The foreign fund house had also bought around 1.6 million shares for Rs 11.83 crore last week. One has to watch out for the IVRCL stock as there could be seen some volatility in today’s trading session.
| BSE Institutional Turnover | ||||||
|---|---|---|---|---|---|---|
|
| FII | DII | ||||
| Trade Date | Buy | Sales | Net | Buy | Sales | Net |
| 16-Apr-12 | 1,341.24 | 1,850.67 | -509.43 | 932.45 | 714.22 | 218.23 |
| 13-Apr-12 | 2,634.23 | 2,496.98 | 137.25 | 1,329.00 | 1,809.29 | -479.68 |
| 12-Apr-12 | 2,030.33 | 1,894.35 | 135.98 | 1,087.74 | 850.34 | 237.4 |
| April , 12 | 16,023.03 | 16,678.87 | -655.84 | 8,376.65 | 8,525.38 | -148.12 |
| FII DERIVATIVES STATISTICS FOR 16-April-2012 | |||||
|---|---|---|---|---|---|
|
| BUY | SELL | OI (End of the day) | Net Position | |
|
| Rs (crore) | Rs (crore) | No. of contracts | Rs (crore) | Rs (crore) |
| INDEX FUTURES | 1335.69 | 1669.27 | 374404 | 9683.55 | -333.58 |
| INDEX OPTIONS | 10780.61 | 11000.37 | 1430611 | 37383.01 | -219.76 |
| STOCK FUTURES | 1533.71 | 1431.85 | 821843 | 23112.70 | 101.86 |
| STOCK OPTIONS | 1040.35 | 1040.53 | 44509 | 1246.74 | -0.18 |
| Total | 14690.36 | 15142.02 | 2671367 | 71425.99 | -451.66 |
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