Opening Bias
The Indian equity markets may open negative as the skeletons of the sovereign euro debt crisis re-emerge to haunt the global economy. The SGX Nifty is trading down by 39 points at 4,837, indicating a gap down opening to the markets today.
| Benchmark Indices |
|---|
| Index | Closing | % Change |
|---|
| SENSEX | 16215.84 | -0.47 |
| NIFTY | 4907.80 | -0.43 |
| Dow Jones | 12695.35 | -0.98 |
| S&P 500 | 1338.35 | -1.11 |
| NASDAQ | 2902.58 | -1.06 |
| Bovespa | 57539.61 | -3.21 |
| FTSE | 5465.52 | -1.97 |
| DAX | 6451.97 | -1.94 |
| CAC | 3057.99 | -2.29 |
| LIVE |
| Hang Seng | 19724.89 | -0.05 |
| Nikkei | 8877.57 | -1.07 |
| Shanghai | 2371.53 | -0.39 |
Overnight, most of the major global stock market indices slumped as fears were growing that Greece could soon be ousted from the euro zone in an increasingly likely confrontation with its international creditors, as the chances for an 11th-hour deal for a coalition government looked ever more remote. The US stocks closed at more than three-month lows, and the Dow industrials slid for the eighth session in nine, as investors on Wall Street worried about Greece’s potential exit from the euro zone. However, the worst hit markets were the European indices which stirred fresh carnage across the financial markets the as euro zone finance ministers prepared to meet in Brussels. Most major global commodities also lost some ground as oil fell to the lowest level in almost five months after Saudi Arabia’s oil minister said that prices should decline further.
| Currency Rates |
|---|
| Particulars | Rs/$ | Rs/Euro | Rs/GBP | Rs100/JYP |
|---|
| RBI Rate | 53.7118 | 69.2260 | 86.3444 | 67.1000 |
| Future | 53.9500 | 69.6425 | 86.9800 | 67.8100 |
Back home, the contagion effect of the euro zone debt crisis coupled with our very own inflation woes have left the dollar lurking dangerously close to the Rs 54 per dollar mark. Experts on Dalal Street suggest that the currency could go past its lifetime low of Rs 54.3 per dollar which it touched last December, as the weakness prevailing in the European nations will lead to a softening in demand for goods, thus worsening the external trade balance. At the same time, thanks to our country’s highly subsidised regime, the imports may surge as a result of the cushion that fuel products like petrol and diesel get from international prices. In a nutshell, the mood on the street suggests that the Rs/USD rate would remain sticky at the current levels if not slide down further.
| Key Global Indicators |
|---|
| Particulars | Gold (Rs/10gm) | Crude ($/bbl) |
|---|
| Spot | 28725 | 111.13 |
| % change | - | 0.12 |
| Future | 28239 | 94.34 |
| % change | -0.44 | -0.46 |
In conclusion, for today we see the markets remaining volatile with a negative bias. Despite the euro zone finance ministers announcing in the wee hours of today morning that they were not considering a Greek exit from the euro zone, we believe that the global markets would continue to remain negative. We advise investors to remain cautious while taking investment decisions.
Stocks In Action
According to a press release on the BSE, engineering and construction major Larsen & Toubro has reported better-than-expected growth of 31.6 per cent year-on-year in its adjusted profit after tax of Rs 1,920 crore for the fourth quarter of FY12. The total income, however, came in lower than expected at Rs 18,461 crore - a growth of 21 per cent as compared to Rs 15,261 crore during the same period last year. The company then went on to disappoint the street by reporting lower order inflow and margins. The EBITDA margins declined at 13.65 per cent in the January-March quarter of 2012 as against 15.22 per cent in the corresponding quarter of the last fiscal. L&T received orders worth Rs 70,574 crore in the financial year 2011-12 - quite lower than its forecast of Rs 80,000-84,000 crore due to deferred execution and lost orders.
According to Business Standard, at least 11 companies, including state-owned GAIL (India) and Oil India, have expressed interest to buy a stake in billionaire Mukesh Ambani’s privately owned firm Reliance Gas Transportation Infrastructure (RGTIL). RGTIL was originally a subsidiary of Reliance Industries Ltd (RIL) and was incorporated in March 2003 to transport natural gas from eastern offshore gas fields to the consumption centers. Two years later, it was transferred to Mukesh Ambani, chairman of RIL. It was said at that time that Ambani may sell stake in the company through an initial public offering (IPO) once RIL’s eastern offshore KG-D6 field hit peak volumes of 80 mmscmd. But with the KG-D6 output plummeting to less than 34 mmscmd it seems that he wants to sell the gas pipeline business.
According to press filing to both exchanges, steel maker JSW Steel reported a 10 per cent decline in net profit at Rs 752 crore for the quarter ended March 2012. It was Rs 832 crore in the corresponding period a year ago. However, the total income was up by 34 per cent at Rs 9,593 crore as against Rs 7,164 crore in March 2011. For the financial year ended March 2012, JSW Steel’s net profit dipped by 19 per cent to Rs 1,626 crore from Rs 2,010 crore in the previous financial year. The total income though was up by 37 per cent at Rs 32,302 crore as against Rs 23,602 crore in FY11. The company announced a dividend of Rs 7.50 (75 per cent) for every per share of Rs 10.
The world’s second-largest drip irrigation firm, Jain Irrigation Systems (JISL), announced acquisition of 100 per cent stake in the joint venture firm NaanDanJain. At present, Jain Irrigation has 50 per cent stake in NaanDanJain and holds the option of buying out the remaining stake in the joint venture company. Jain announced this morning that it has signed an agreement with Kibbutz Naan to acquire the remaining 50 per cent of NaanDanJain.
BPO major Genpact said it will acquire Atyati Technologies, a technology platform provider for the rural banking sector in India, for an undisclosed amount. The acquisition of Atyati Technologies provides Genpact with a technology platform in the rural banking space with last mile functionality, Genpact said in a statement. The deal is expected to close in 3-4 weeks, subject to the satisfaction of certain customary conditions. The terms of the deal were not disclosed.
The government said that Coal India (CIL) has signed a pact with the Government of Limpopo, South Africa for jointly identifying, exploring and developing coal mines. “CIL has executed a Memorandum of Understanding with organisations owned by the provincial Government of Limpopo, South Africa to engage in joint initiatives of identification, exploration and development of coal assets,” Minister of State for Coal Pratik Prakashbapu Patil said in a written reply to the Rajya Sabha. The minister also said that in order to execute the pact, it would be required to set up a subsidiary of the PSU firm in South Africa.
Japanese two-wheeler giant Yamaha said it would set up its third facility in India, entailing an investment of Rs 1,500 crore over the next five years. The company’s wholly-owned subsidiary — India Yamaha Motor (IYM) — will start the production of this new plant near Chennai by 2014 with an initial annual capacity of 4 lakh units, which will be expanded to 18 lakh units by 2018. “India Yamaha Motor has signed a Memorandum of Understanding with the Government of Tamil Nadu approving the construction and operation of a new two-wheeler factory in the state,” the company said in a statement. The facility will be located at the industrial park in Vallam Vadagal on outskirts of Chennai and the construction is scheduled to begin in September 2012, it added.
Corporate Action
| Stocks Paying Dividend (Ex-Date) |
|---|
| Scrip Name | Action | Rs |
|---|
| Automobile Corp-$ | Final Dividend | 12.50 |
| D B CORP | 2nd Interim Dividend | 1.75 |
| BSE Institutional Turnover |
|---|
| | FII | DII |
|---|
| Trade Date | Buy | Sales | Net | Buy | Sales | Net |
|---|
| 14-May-12 | 2,080.58 | 1,725.48 | 355.10 | 850.14 | 995.19 | -145.05 |
| 11-May-12 | 1,525.07 | 1,366.51 | 158.56 | 813.02 | 1,056.31 | -243.29 |
| 10-May-12 | 1,916.25 | 1,598.83 | 317.42 | 1,046.05 | 1,189.58 | -143.53 |
| May , 12 | 19,815.13 | 19,651.05 | 164.08 | 9,285.41 | 9,679.53 | -394.12 |
| FII DERIVATIVES STATISTICS FOR 14-May-2012 |
|---|
| | Buy | Sell | OI (End of day) | Net Position |
|---|
| Particulars | Rs (crore) | Rs (crore) | No. of contracts | Rs (crore) | Rs (crore) |
|---|
| Index Futures | 1451.71 | 1831.06 | 461247 | 10951.22 | -379.35 |
| Index Options | 19526.93 | 19199.36 | 1594802 | 39286.29 | 327.56 |
| Stock Futures | 1268.55 | 1317.60 | 881525 | 20767.31 | -49.05 |
| Stock Options | 815.16 | 778.74 | 44049 | 1064.90 | 36.43 |
| Total | 23062.35 | 23126.76 | 2981623 | 72069.73 | -64.40 |