Markets May Open On A Positive Note
DSIJ Intelligence / 05 Jun 2012
| Benchmark Indices | ||
|---|---|---|
| Index | Closing | % Change |
| SENSEX | 15988.4 | 0.15 |
| NIFTY | 4848.15 | 0.14 |
| Dow Jones | 12101 | -0.14 |
| S&P 500 | 1278 | 0.01 |
| NASDAQ | 2760 | 0.46 |
| Bovespa | 53416.75 | 0.03 |
| FTSE | 5260 | -1.14 |
| DAX | 5978 | -1.19 |
| CAC | 2954 | 0.14 |
| .. | ||
| Hang Seng | 18405.76 | 1.21 |
| Nikkei | 8358.79 | 0.76 |
| Shanghai | 2308.31 | -0.01 |
The Indian markets recovered yesterday from the early morning low as investors saw the attractive valuations of some of the stocks. Also, investors and traders are speculating that the RBI may cut the rate in its monetary meet scheduled for June 18, 2012 to fuel growth in the economy. This is after last week’s dismal GDP growth of a mere 5.3 per cent in the March 2012 quarter which was almost at its nine-year low. Moreover, according to various reports, the monsoon this time would probably be normal and this will help cut the inflation level.
Overnight, the US markets closed trading marginally in the green zone. This was after the investors adopted a ‘wait and watch’ approach over certain major events, including the US Fed meet. Also, the uncertain euro environment kept investors on the edge. The European markets closed yesterday with the FTSE and DAX in the negative territory, down by more than 1 per cent, while the CAC closed its day marginally in the green zone. On the other hand, the Asian markets have opened in the positive zone as investors hope that there would be some action from the government to help fuel growth in the economy.
| Key Global Indicators | ||
|---|---|---|
| Gold (Rs/10gm) | Crude ($/bbl) | |
| Spot | 29809 | 99.42 |
| % change | - | 0.58 |
| Future | 29908 | 84.75 |
| % change | -0.63 | 0.92 |
| Currency Rates | ||||
|---|---|---|---|---|
| Rs/$ | Rs/Euro | Rs/GBP | Rs100/JYP | |
| RBI Rate | 55.1555 | 68.863 | 85.2912 | 71.01 |
| Future | 55.73 | 69.22 | 85.64 | 71.3425 |
The depreciating rupee continues to be a major headwind for our economy. The rupee is currently trading at 55.155 against a dollar. Brent crude has come down from the level of USD 125 in the past couple of months to 99 per barrel – a good sign for the economy. However, the depreciating rupee has offset some of this benefit. Along with this, the result season has made the markets more volatile.
In conclusion, we expect the markets to remain volatile as investors are jittery in this uncertain environment. We advise investors to therefore play with caution.
Stocks In Action
According to Business Standard, Hero MotoCorp has approved a proposal to merge the investment arm of its parent company with the auto maker. Bain Capital, a private equity fund house, and the Government of Singapore Investment Corp (GIC), which helped fund the company’s buy-out of its former partner Honda last year, will have direct stakes in the company after the merger. After the proposed merger, Bain and GIC will own 8.58 per cent and 3.71 per cent respectively in the auto maker. On the back of this news one could see some volatility in the share price of Hero Motocorp in today’s trading session.
Man Industries, one of the leading pipes manufacturing company, has received new orders worth approximately Rs 800 crore from the Middle East and domestic customers for supply of large dia meter pipes for the oil & gas sector. With these new orders, the total outstanding order book stands at around Rs 1,800 crore. These orders are to be executed over a period of 12 to 15 months. The stock yesterday closed marginally higher by 0.36 per cent at Rs 97.55 but today one may see some volatility in the share price.
Prism Informatics had acquired around 20.28 per cent stake in Idhasoft (IDHA), which is an unlisted company, on April 2, 2012. Yesterday the company made an announcement to the BSE that it is planning to acquire another 20.01 per cent stake in the same company, thus reaching an aggregate of around 40.29 per cent in IDHA. With this move Prism would be the largest shareholder of IDHA. On the back of this news one may see some volatility in the share price of Prism Informatics in today’s trading session.
Arshiya International, post-market, informed the BSE that its company secretary and compliance officer have resigned from the company. Also, there was news that Cisco Systems would optimise its regional distribution through Arshiya’s Mumbai FTWZ. On the back of this news the stock may see some volatility in today’s trading session.
According to media reports, banks are set to restructure loans worth Rs 4,600 crore extended to metal companies like Visa Steel and Varun Industries. The banks, on an aggregate basis, have exposure of around Rs 3,000 crore to Visa Steel and around Rs 1,600 crore to Varun Industries. Some of the leading banks that probably have this exposure may be State Bank of India and Indian Bank. One may see volatility in the share price of the above mentioned stocks in today’s trading session.
| FII DERIVATIVES STATISTICS FOR 4-June-2012 | |||||
|---|---|---|---|---|---|
| BUY | SELL | OI (End of the day) | Net Position | ||
| Rs (crore) | Rs (crore) | No. of contracts | Rs (crore) | Rs (crore) | |
| INDEX FUTURES | 1153.24 | 1501.07 | 330210 | 7801.25 | -347.84 |
| INDEX OPTIONS | 13446.84 | 13933.96 | 1475269 | 35748.83 | -487.12 |
| STOCK FUTURES | 1083.30 | 977.49 | 866740 | 20002.20 | 105.81 |
| STOCK OPTIONS | 722.85 | 671.23 | 26613 | 631.53 | 51.62 |
| Total | 16406.23 | 17083.75 | 2698832.00 | 64183.81 | -677.52 |
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