The Indian equity markets may open sideways amidst much volatility ahead of the announcement of the WPI inflation data for the month of April 2012. The SGX Nifty is trading up by 17 points at 4,934, indicating a gap up opening to the markets today.
Opening Bias
The Indian equity markets may open sideways amidst much volatility ahead of the announcement of the WPI inflation data for the month of April 2012. The SGX Nifty is trading up by 17 points at 4,934, indicating a gap up opening to the markets today.
Benchmark Indices
Index
Closing
% Change
SENSEX
16292.98
-0.77
NIFTY
4928.90
-0.74
Dow Jones
12820.6
-0.27
S&P 500
1353.39
-0.34
NASDAQ
2933.82
0.01
Bovespa
59445.21
-0.43
FTSE
5575.52
0.57
DAX
6579.93
0.95
CAC
3129.77
-0.01
LIVE
Hang Seng
19936.60
-0.14
Nikkei
9009.24
0.62
Shanghai
2399.94
0.21
Last week, both global as well as our equity markets ended on a negative note chiefly led by mounting concerns over the re-emergence of the sovereign debt crisis following Greece’s recent political fiasco and as the Indian rupee depreciated further towards the crucial Rs 54 per dollar mark. Despite some positive news flows like the deferment of the implementation of the GAAR, this recent decline in the markets gives a fair indication that the market sentiments are negative and the outlook going forward is gloomy.
Currency Rates
Particulars
Rs/$
Rs/Euro
Rs/GBP
Rs100/JYP
RBI Rate
53.6410
69.2880
86.4237
67.2000
Future
53.8000
69.5700
86.6300
67.2000
As for today, the trading bias would mainly be driven by the WPI inflation numbers for the month of April. Investors and traders on the street would be looking forward to the government’s inflation data for April in the wake of disappointing IIP data for March that has renewed concerns over fundamental weakness in the economy. We at DSIJ, notwithstanding market expectations of a slight relief in inflation, believe that only a big positive surprise in the inflation data will improve the sentiments. Otherwise, the short-term trend will remain negative.
Key Global Indicators
Particulars
Gold (Rs/10gm)
Crude ($/bbl)
Spot
28725
111.79
% change
-
-0.42
Future
28382
95.39
% change
0.09
-0.77
In conclusion, for today we see the markets remaining volatile. With corporates like Larsen & Tubro, State Bank of India and Bajaj Auto expected to announce their March 2012 quarter earnings this week, one may see some heavy volatility in the markets over the coming week. One could also watch the sectoral indices which may witness some heavy movement this week, owing to the corporate results outlined above. We advise investors to remain cautious while taking investment decisions.
Stocks In Action
According to Business Standard, state-run Central Bank of India has said it will be requiring over Rs 14,000 crore of fresh capital to meet the Basel-III guidelines which will kick in from the next fiscal. As of March 31, the government had a 79 per cent stake in the bank. An FPO will require the government to participate equally in the offering. According to research by Care Rating, the banks require up to USD 55 billion in fresh equity capital to meet the Basel-III norms. The agency said that the private banks are better placed than the state-run ones when it comes to capital adequacy. The public sector banks will be required to raise up to USD 20 billion from the capital markets, it predicted.
According to a press release on the BSE, Chambal Fertilizers and Chemicals reported a 37.5 per cent increase in its standalone net profit to Rs 93.18 crore for the quarter ended March 31, 2012. The company had reported net profit of Rs 67.72 crore in the year-ago period. The net sales of the company rose to Rs 1,882.83 crore in the fourth quarter of the last fiscal from Rs 807.15 crore in the same quarter of the 2010-11 fiscal. The company’s board of directors has recommended a dividend of Rs 1.90 per equity share of Rs 10 each.
According to a press filing on the BSE, fertiliser maker Zuari Industries Ltd (ZIL) posted a standalone net loss of Rs 4.37 crore for the fourth quarter ended March 31, 2012. The company had posted net profit of Rs 21.42 crore in the year-ago period. The net sales of the company stood at Rs 23.54 crore during the quarter as compared to Rs 966.38 crore in the year-ago period.
According to a press release on the BSE, engineering firm Greaves Cotton reported 66.61 per cent increase in net profit at Rs 77.74 crore for the fourth quarter ended March 31. The company had posted net profit of Rs 46.66 crore in the corresponding period last year. The total income from operations during the quarter, however, declined by 1.82 per cent to Rs 445.41 crore from Rs 453.67 crore in the year-ago period. The board of directors has recommended a final dividend of Rs 0.20 per share of face value of Rs 2 each.
According to a press release on the BSE, private sector lender Federal Bank reported a jump of 32.31 per cent in net profit to Rs 776.79 crore for 2011-12 and said that it will focus more on retail credit in the current fiscal. The Kochi-based lender had posted net profit of Rs 587.08 crore in the previous fiscal. The bank said that the overall asset quality has brought down its non-performing assets. During 2011-12, the total income of the bank grew by 33.31 per cent to Rs 6,091 crore from Rs 4,568.84 crore, while its net interest margin (NIM) stood at 3.79 per cent. The total deposits rose by 13.77 per cent from Rs 43,014.78 crore to Rs 48,937.12 crore, while advances increased by 18.16 per cent from Rs 31,953.23 crore to Rs 37,755.99 crore.
Expect some positive movement in the shares of oil refineries like IOCL, BPCL and HPCL as media reports suggest that these OMCs may look forward to raise the retail petrol prices soon after the current parliament budget session comes to an end. This move, as per street estimates, would help them recover the revenue losses of Rs 5,000 crore.