Markets To Remain Choppy, All Eyes On NTPC

Markets have been lacklustre over the last few trading sessions, with caution at a rise since the last couple of days. Government divestments have taken the stage since the last couple of days. On February 5, the government announced to sell 78.32 crore shares constituting about 9.5% of the equity of NTPC through an Offer For Sale (OFS). This divestment, with the floor price set at Rs 145 per share is scheduled to take place today. Considering the floor price set, share prices of NTPC have corrected post the announcement and now reached a level of Rs 152 per share. This recent correction yet makes Rs 145 a good price for subscription.

Steel Authority of India (SAIL) too has been witnessing a major decline in prices lately. It declined by 4.27% yesterday due to concerns of its government divestment to take place at a heavily discounted price. These fears have been triggered by the recent downward outlook of SAIL and the likelihood of government’s divestment in the company any time soon.

Apart from the above trends caused due to a cautious approach due to government action, midcaps are likely to remain in action today. Movement in this space would be aided by the Q3 earnings. Companies announcing their Q3FY13 results today include ACC, Ambuja Cement, Apollo Hospitals, Balaji Telefilms, Bombay Dyeing, Ceat, GE Shipping, Gillette, Gulf Oil Corporation, Hathway Cables, JK Tyre, MRF, NDTV, OMDC, PC Jeweller, Talwalkars and Uflex among others. Considering there are tons of results scheduled to be announced today, expect stock-specific, earnings related movement to take place today.

Globally too, market movement has been dominated by the earnings season. Time Warner, Wyndham Worldwide and Zynga shaped the American markets while Hargreaves Lansdown shaped up UK. In Europe, the political scenario in Italy too has been taking limelight. Former Italian Prime Minister Silvio Berlusconi has been gaining ground ahead of the general elections thus fuelling concerns over the economic health of Italy. This has been getting Europe quite jittery lately.

Overall, the word on the street is caution. The response to NTPC’s OFS will help shape markets today. Moreover,  expect a lot of stock-specific and earnings-related movement in midcap stocks. Due to the above factors, the opening on the Indian markets is likely to be choppy. However, direction will shape up as we move ahead in today’s trading session.