Markets May Open Negative

The markets yesterday closed the day higher. This was majorly on the back of IT and tech stocks which helped the market close at an upper level. TCS posted robust March quarter numbers which were in line with the market expectations, creating a sense of confidence among the investors.  Meanwhile, the Supreme Court refused to grant 400 days to the government to complete the process of fresh 2G auctions. However, it has extended the deadline from June 2 to August 31, 2012.

Overnight the European market recovered from Monday’s major losses on the back of strong earnings from one of the European banks and after the sales of new homes in the US economy exceeded the street forecast. The US markets closed with a mixed bag with Dow and S&P closing in the positive territory while NASDAQ closed lower by 0.30 per cent.

The rupee has shown signs of nervousness, which further depreciated yesterday, almost reaching the three-and-a-half month low and creating pressure in the economy. It is now trading at 52.7650 against the US dollar. Brent crude remained almost flat, closing at USD 118.24 a barrel. The fears of further rupee depreciation from here on are higher as the crude prices continue to be at a higher level. Along with this the result season has already started and therefore the market may see volatility going ahead. One could keep a track of stocks like Alfa Laval, India Cements, LIC Housing Finance, Raymond, Nestle India, Sterlite Industries, Wipro, Yes Bank, etc.

In conclusion, for today we expect the markets to be volatile and investors should watch out for companies which are going to declare their March quarter results. Hence one has to take a cautious approach while investing in the markets. 

According to Economic Times, Diageo, the world’s foremost spirits company by value, is planning to buy a minority stake in the Mallya-owned United Spirits. If the deal gets executed, than according to the reports Diageo is likely to take a stake of around 26 per cent. However, both the companies have denied the news and termed it as rumours or speculation. One may see a volatile stock price movement in the shares of United Spirits and also the Mallya-owned Kingfisher Airlines.

The standing committee on finance headed by Yashwant Sinha has come down heavily on the government’s share sale in ONGC, terming it financial engineering that transferred funds from one pocket to another. The committee has asked the IRDA to investigate into the matter and wants to check whether LIC has violated any norms in picking up the bulk of the offering. The ONGC shares might see some pressure on the back of the above news.

It seems that the drama for the fuel supply agreement will not stop making it to the headlines. Coal India, which was not ready to sign the agreement, has finally accepted the government’s orders but after making some changes that will have the least impact on the company. Now power companies like NTPC, DVC and other private players are protesting the new model. They are of the opinion that the proposed contract is biased and absolves the mining giant of all obligations.One could see price movement in power stocks and also in Coal India in today’s trading sessions.

According to media reports, Essar Shipping is planning to reduce its debt of around Rs 5,740 crore which would allow its bottomline to grow further. The company is facing a high interest burden which is evident from the fact that in the December quarter results the company’s interest and finance expense increased by approximately 39 per cent. The move will help the company and the news could see the stock inch higher in today’s trading session.

ING Vysya Bank posted a good set of numbers yesterday post the market closure. Its net profit increased by 39.5 per cent to Rs 127 crore. Yesterday the scrip closed 2 per cent higher on the back of speculation that the bank may post a good set of numbers. One could see the scrip continue its yesterday’s trend of moving northwards.

Sesa Goa reported dismal March quarter numbers which could have a negative impact on its share price in today’s trading session. On a consolidated basis the total income of the company decreased by 12 per cent to Rs 8,544 crore while its net profit plunged by 20 per cent to Rs 1,162 crore.

Eros International Media, a leading global company in the Indian film industry, has advised that that its parent company, Eros International PLC, anticipates entering into an agreement to acquire control of the B4U television network. The scrip could see some movement in today’s trading session.

Dr Reddy’s Labs yesterday made an announcement post market hours that the company has launched Olanzapine tablets, a bio-equivalent generic version of Zyprexa tablets in the US markets on April 23 following approval by the USFDA. The news could have a positive impact on the share price of Dr Reddy’s Labs.