Indian Markets May Continue Its Losing Streak, Open Negative

DSIJ Intelligence / 03 May 2012

The Indian equity markets may continue their losing streak and open negative in line with the weak global cues. The SGX Nifty is trading down by 18 points at 5,215, indicating a gap up opening to the markets today.

Opening Bias

The Indian equity markets may continue their losing streak and open negative in line with the weak global cues. The SGX Nifty is trading down by 18 points at 5,215, indicating a gap up opening to the markets today.

Benchmark Indices

Index

Closing

% Change

SENSEX

17301.91

-0.10

NIFTY

5239.15

-0.17

Dow Jones

13268.57

-0.08

S&P 500

1402.31

-0.25

NASDAQ

3059.85

0.31

Bovespa

62423.56

0.98

FTSE

5758.11

-0.93

DAX

6710.77

-0.75

CAC

3226.33

0.42

LIVE

Hang Seng

21204.43

-0.49

Nikkei

9380.25

0.00

Shanghai

2432.65

-0.24

Overnight, global stock indices in Europe and the US mostly finished their day lower as the euro weakened for a third day against the dollar and reports showed that the US employers added fewer payrolls than had been forecast and the euro area unemployment rose to a 15-year high. The Asian markets have opened on a negative note with Hang Seng and Shanghai trading in the red zone after reports came in that Singapore’s state investment firm, Temasek Holdings, is seeking to raise up to USD 2.5 billion by selling part of its stakes in Chinese lenders viz. Bank of China Ltd and China Construction Bank Ltd via placements. The sale of shares in Chinese banks is because the share prices of these banks have risen sharply this year and Temasek has been rebalancing its portfolio. 

Currency Rates

Particulars

Rs/$

Rs/Euro

Rs/GBP

Rs100/JYP

RBI Rate

52.9305

69.9425

85.8533

65.8700

Future

53.2725

69.9650

86.1400

66.2500

Back home, despite the weak opening to markets today, there is some positive respite on the overall macro-economic level as data compiled by Markit showed that HSBC India’s manufacturing PMI rose to 54.9 in April 2012 from 54.7 in March, after slowing down for two successive months. This data depicts the industry’s output health of the economy and a reading of over 50 on the index indicates expansion in manufacturing activity. By looking at yesterday’s data one can sum it all up by saying that the pace of growth in India’s factory sector has inched up, supported by bulging order books, but slower output growth and increasing price pressures have dampened the sentiments.  

In other major developments, the Reserve Bank of India (RBI) yesterday directed Indian banks to maintain a minimum Tier I capital or core capital of 7 per cent under the final guidelines on Basel-III capital regulations. Moreover, the regulator, for the first time, asked lenders to keep a capital conservation buffer of 2.50 per cent. Basel -III guidelines aim to make banks more resilient against any unexpected economic crisis. It prescribes more stringent capital and liquidity requirements for them. After its full implementations the total capital adequacy ratio will stand at 11.50 per cent as against 9 per cent currently. Further updates on the Basel-III capital norms will follow shortly.

Key Global Indicators

Particulars

Gold (Rs/10gm)

Crude ($/bbl)

Spot

28070

118.25

% change

-

0.07

Future

29185

105.07

% change

0.19

-0.14

In conclusion, for today we see the markets remaining volatile with a negative bias. With the March quarter results’ season picking up pace, one has to keep a close track of stocks which are going to announce their March quarter results since the management guidance will provide cues for the stock as well as for the sector. We advise investors to remain cautious while taking investment decisions. 

Stocks In Action

According to a press release on the BSE, Petronet LNG, India’s largest liquefied natural gas importer, has signed an agreement to build a 5 million tonnes a year import facility at Gangavaram port on the Andhra coast. The Rs 4,500 crore plant will be Petronet’s third LNG import terminal in the country - it currently operates a 10 million tonnes a year facility at Dahej in Gujarat and is building another 5 million tonnes per annum unit at Kochi in Kerala by the year end. The LNG terminal at Gangavaram Port will comprise of facilities for receiving, storage and regasification of LNG and would be built in 42 months. LNG is natural gas liquefied at minus 160 degree Celsius temperature for ease of transporting it in ships.

According to Business Standard, a section of Kingfisher Airlines’ staff, including engineers and pilots, are mulling the option of moving the Labour Court to expedite settlement of their dues, claiming that their salaries have still not been cleared.

According to a press statement on the BSE, luggage maker VIP Industries has incorporated a wholly-owned subsidiary in Bangladesh to set up a luggage manufacturing plant. The company, however, did not share any financial details. The company had last year announced a major makeover with focus on the fashion baggage and accessories segment. It had announced the launch of an array of products in ladies’ fashion bag segment with plans to ramp up its product portfolio in the accessories’ category. However, the shares of VIP Industries today closed at Rs 93 on the BSE, down by 4.42 per cent from its previous close.

According to a press release on the BSE, India’s largest telecom company by subscribers, Bharti Airtel, has reported a consolidated net profit of Rs 1,006 crore in the fourth quarter ended March, down by 28 per cent from Rs 1,400 crore a year earlier. The telecom major has reported yet another quarterly profit decline as intense price competition and losses on foreign exchange eroded its earnings. The consolidated net income was impacted by higher costs on account of 3G licence fee amortisation (Rs 106 crore), 3G interest cost (Rs 84 crore), forex fluctuation losses (Rs 132 crore) and tax provisions (Rs 198 crore). 

According to a press release on the BSE, top two-wheeler manufacturer Hero MotoCorp’s fourth quarter net profit rose by 20 per cent year-on-year to Rs 604 crore, helped by highest ever sales in the quarter. The company also announced that it is raising product prices by Rs 500-1,000 effective Wednesday to offset the rising input costs. The company’s total turnover was up by 12 per cent from a year ago to Rs 6,035 crore in January-March. The company’s net profit was a tad lower than analysts’ expectation of Rs 616 crore, on revenue of Rs 5,985 crore. During the three-month period, Hero MotoCorp sold 15,72,027 units, up by 8 per cent from a year ago. Its EBITDA margin for the fourth quarter was at 15.33 per cent.

According to the Hindu Business Line, Orchid Chemicals & Pharmaceuticals has received US Food Drug Administration (FDA) approval for its ANDA (abbreviated new drug application) for Naratriptan tablets in the 1 mg and 2.5 mg strengths. Naratriptan is said to be the generic equivalent of GlaxoSmithKline Pharmaceutical’s Amerge tablets and is used to treat migraine headaches. The US market size for the product is about USD 30 million (2011 sales). This product is part of the strong oral non-antibiotic formulations pipeline for Orchid and will be manufactured at its FDA-approved plant located in Chennai. The company hopes to garner a good revenue pattern from this product. Orchid would be launching this product in the US during this quarter.

Corporate Action

Stocks Paying Dividend (Ex-Date)

Scrip Name

Action

Rs

HCL Infosystems

3rd Interim Dividend

1.00

GM Breweries

Dividend

2.50

Corp Action

Scrip Name

Action

Ratio

Golden Sec

Stock Split

Rs 10/- to Rs 5/-

Results Today

Scrip Name

Action

Scrip Name

Action

Aditya Birla Money-$

Mar-12

KEC Intl

Mar-12

Aventis Pharma

Mar-12

Marico

Mar-12

Finolex Cables

Mar-12

NDTV

Mar-12

Great Eastern Sh

Mar-12

Piramal Health

Mar-12

Gujarat Pipavav

Mar-12

Shriram Asset

Mar-12

IL&FS Invest Mgrs

Mar-12

TVS Electronics

Mar-12

Ingersoll Rand

Mar-12

Universal Cabl

Mar-12

BSE Institutional Turnover

 

 FII

 DII

Trade Date

 Buy

 Sales

 Net

 Buy

 Sales

 Net

2-May-12

2,241.70

2,004.23

237.47

939.25

868.13

71.12

30-Apr-12

2,100.62

1,621.09

479.53

668.05

914.86

-246.81

28-Apr-12

6.20

0.03

6.17

8.89

19.57

-10.68

May , 12

2,241.70

2,004.23

237.47

939.25

868.13

71.12

FII DERIVATIVES STATISTICS FOR 02-May-2012

 

Buy

Sell

OI (End of day)

Net Position

Particulars

Rs (crore)

Rs (crore)

No. of contracts

Rs (crore)

Rs (crore)

Index Futures

1063.99

984.40

329482

8597.60

79.59

Index Options

9157.94

9000.84

1012255

26515.48

157.10

Stock Futures

903.46

1028.82

802480

20433.36

-125.36

Stock Options

430.77

394.00

27884

725.30

36.77

Total

11556.17

11408.07

2172101

56271.74

148.10


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