Indian Markets May Open Sideways With Negative Bias

The Indian equity markets may open sideways with a negative bias. The SGX Nifty is trading down by 9 points at 4,889, indicating a flattish gap down opening to the markets today.

Last Friday, the US stocks chalked up another weekly loss with Facebook Inc.’s debut on Wall Street failing to live up to the hype and on concerns about prospects for global growth. The shares of Facebook Inc. bobbed between gains and losses on heavy volume, holding their ground above the initial public offering price of USD 38 a share, as some other social media companies extended their dayside declines. Experts believe that the US economy is going through a bumpy patch, but signs still point to steady if unspectacular growth in the months ahead. 

Elsewhere in Europe, the situation has not improved much over this weekend. While Spain revised its 2011 public deficit figure to 8.9 per cent of the GDP from 8.51 per cent reported earlier, ratings agency Moody’s cut its ratings on 16 of the nation’s banks, citing concerns over the euro zone crisis. Also, President Barack Obama and a group of eight leaders have said that while global economic recovery shows signs of promise, significant headwinds in the euro zone continue to persist. However, the world leaders have affirmed their interest in Greece remaining in the euro zone and respecting its commitments. 

Back home, following the heavy beating that the Indian equity markets have received over the past couple of trading days, there is much room for some rebound in stock prices. However, the sliding rupee and uncertain developments in the euro zone may play spoilsport to the party. Investors will closely watch news headlines from Greece over the next couple of weeks to assess the possibility of the nation’s chaotic exit from the euro zone. 

In conclusion, for today we see the markets remaining range-bound with some positive spurts in late afternoon trades. However, despite the technical indicators pointing towards a rebound, much of it would depend on the quantum of news flows from the euro zone. There is a lot of negativity looming on the streets and any bad news on the European front at their opening bell may further mar the mood and send the markets spiraling downwards. We advise investors to remain cautious while taking investment decisions. 

According to Economic Times,  Reliance Industries Ltd (RIL) plans to roll out its 4G network in partnership with Himachal Futuristic Communications Ltd (HFCL), the group from which it acquired pan-India airwaves for high-speed internet and data services in May 2010. It is reported that Reliance-owned Infotel Broadband will focus on the key aspects of the network and monitor the rollout, but will leave ground-level execution and management to HFCL, which has prior experience of similar deployment. 

According to a press release on the BSE, Reliance Life Insurance Company, part of the Anil Ambani Group, has reported first full-year net profit at Rs 373 crore for the fiscal ending March 31, 2012. In 2010-11, the company had reported net loss of Rs 129 crore. Reliance Life Insurance, which sold 1.1 million policies in FY12, garnered a total premium of Rs 5,470 crore last fiscal. The company’s total funds under management stood at Rs 18,767 crore as on March 31, 2012.

According to sources, state-run RashtriyaIspat Nigam (RINL) has submitted a draft red herring prospectus (DRHP) with market regulator SEBI to divest 489 million shares or 10 per cent stake through an initial public offer (IPO).The IPO is part of the government’s disinvestment plan to raise Rs 30,000 crore during the current financial year through selling of stakes in state-run companies. The issue price would be determined through the book-building route. It would offer up to 5 per cent discount to retail investors and employees. RINL is the second largest state-run steel maker in the country, producing 3 million tonnes per annum (MTPA) at its lone facility at Visakhapatnam. The capacity is being raised to 6.3 MTPA in the current fiscal.

According to a press release on the BSE, Mannapuram Finance Ltd, a financial services company engaged in the business of extending loans against gold collateral, has posted an 83 per cent year-on-year rise in net profit for the quarter ended March 31, 2012, at Rs 186.96 crore. The firm’s profit for the same quarter a year ago was Rs 101.80 crore. Mannapuram Finance’s total income was up more than 90 per cent, from Rs 420.45 crore for the quarter ended March 31, 2011 to Rs 803.76 crore for the period under review. For the full financial year ended March 31, 2012, the company posted a more than two-fold increase in net profit at Rs 591.46 crore. The profit for FY11 was Rs 282.66 crore. The total income rose by 125 per cent from Rs 1,181.53 crore in FY11 to Rs 2,655.85 crore in FY12.

According to a press release on the BSE, Coal India has posted a 11.71 per cent fall in net profit, at Rs 1,223.52 crore, for the quarter ended March 31, 2012, compared with a profit of Rs 1,385.79 crore for the same quarter a year ago. The PSU firm’s total income rose by 14.86 per cent, from Rs 1,474.33 crore for the quarter ended March 31, 2011 to Rs 1,693.43 crore for the period under review. The company’s profit for the full financial year 2011-12 was up by 71 per cent to Rs 8,065.10 crore, compared with a profit of Rs 4,696.10 crore in FY11. The total income rose from Rs 5,481.96 crore in FY11 to Rs 9,517.57 crore for the year ended March 31, 2012.

According to a press release on the BSE, Tata Steel has posted a dip of as much as 90 per cent in its consolidated net profit, at Rs 433.46 crore, for the last quarter of FY12. The corresponding profit figure for the same quarter a year ago was Rs 4,175.60 crore. Tata Steel’s total income rose from Rs 34,188 crore for the quarter ended March 31, 2011 to Rs 34,220.59 crore for the period under review. The group posted net profit after taxes, minority interest and share of associates of Rs 5,389.77 crore for the year ended March 31, 2012, compared with Rs 8,982.69 crore for the same quarter in 2011. The firm’s total income rose from Rs 1,19,433.10 crore for the year ended March 31, 2011 to Rs 1,34,472.73 crore for the year ended March 31, 2012.

According to a press release on the BSE, City Union Bank has reported 40 per cent growth in net profit during the quarter ended March 31, 2012 at Rs 71.98 crore as against Rs 51.39 crore, a year ago. The bank’s total income rose to Rs 537.31 crore from Rs 391.09 crore, an increase of around 37 per cent. The interest earned by the bank rose to Rs 476.10 crore from Rs 346.07 crore, an increase of around 37 per cent. The gross NPA rose to Rs 123.54 crore from Rs 112.47 crore, an increase of around 9 per cent while the net NPA dropped to 0.44 per cent from 0.52 per cent.