Thursday, May 10, 2012
The Indian markets may begin the trade on a flat note on the back of mixed Asian cues. SGX Nifty is trading 32.50 points higher. Headlines for the day: Cairn Energy acquires Agora Oil and Gas. Jewellery industry to see muted demand in 2012: Fitch. RIL raises Rs10K cr for petrochemical plant expansion. MTNL to offer VRS to about 20,000 employees. Sesa Goa shareholders meet June 19 on Sterlite merger. Events for the day: Results: Apollo Tyres, Cadila Healthcare, Canara Bank, Cipla, Jain Irrigation Systems, Jubilant FoodWorks, Lupin, NTPC.
The market is likely to see a firm start as most Asian markets edged higher on Thursday on news that Greece will receive its latest debt bailout payment. However, selling by foreign funds in the prior three trading sessions and weakness in the rupee may cap gains. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 13 points at the opening bell. Power generation major NTPC unveils its FY 2012 results today, 10 May 2012. Pharma major Cipla also declares its Q4 results today, 10 May 2012. State-run oil exploration giant ONGC reportedly plans to foray into city gas distribution business and sale of imported liquefied natural gas business through a new subsidiary ONGC Gas. Reliance Industries (RIL) may see action after the company market hours on Wednesday, 9 May 2012, said it has signed a $2 billion equivalent loan with nine banks covered by Euler Hermes Deutschland AG. ("Euler Hermes") on 7 May 2012 at Berlin, Germany. The loan will be primarily used to finance goods and services procured from German suppliers as part of RIL's petrochemicals expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India. The facility is among the largest underwriting by Euler Hermes in recent years, RIL said. Euler Hermes has for the first time accorded 'Better than Sovereign' rating to a corporate, RIL said.
RIL chairman Mukesh Ambani has voluntarily capped his compensation at Rs150mn, despite having shareholders approval to earn 61% more. (ET) Put off by stifling rules and a hostile business environment, India’s largest micro-lender SKS Microfinance will move its headquarters from Hyderabad to Mumbai. (ET) The government has initiated legal action against Kingfisher Airlines towards dishonour of the cheques submitted by the carrier, while Jet Airways and Spicejet have been served notices on airport charges overdues. (ET) Piramal Healthcare is in talks with Future Generali to buy Future Group’s stake in the life insurance joint venture. (ET)
The Indian markets closed marginally lower on Wednesday, extending losses from the previous session, with the NSE Nifty ending below the 5000 mark for the first time since January 18, 2012. The session was particularly choppy, with the key indices swinging back and forth almost throughout the day. With this, the Nifty has lost ~150 points in the last two sessions. Sustained selling pressure was seen in Metals, Realty, Banking, Power, PSU and Oil & Gas stocks. The BSE Sensex ended at 16,479 losing by 0.4% or 66 points. It had earlier touched a day’s high of 16,615 and a day’s low of 16,422. It opened at 16,436. The NSE Nifty settled at 4975 down by 25 points or 0.5%. It touched a day’s low of 4,960 and day’s high of 5,013. The INDIA VIX on the NSE further surged by 4% to close at 23.04. It hit days high of 23.87. It hit a low of 22.06. The market breadth continued to remain negative, 1796 stocks declined and 936 stocks advanced.
"Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal." - Friedrich Nietzsche. The market is treading along with no clear goal in sight. While, the GAAR deferment saved the day on Monday, eurozone worries caused a tumble on Tuesday. Weakness persisted on Wednesday and the volatile Nifty closed below 5000 again. Greece and Spain continue to be major source of fear. Efforts to form a government in debt-plagued Greece have failed. Spanish shares plunged amid growing talk that troubled lender Bankia SA will be nationalised. Spanish bond yields crossed 6% again. In the US, the Dow is experiencing its worst losing streak since August 2011. Oil and gold futures extended losses while the dollar was firm. Large markets in Europe escaped steeper losses and Asian indices are mixed. We see a slightly positive opening but market players are likely to remain skittish amid persistent FII selling and weakness in the rupee. Watch out for the IIP data on Friday. Result-oriented action is likely to continue.