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Monday, July 29, 2013

Caution ahead of policy; weak start

"A policy is a temporary creed liable to be changed, but while it holds good it has got to be pursued with apostolic zeal." - Mahatma Gandhi

The market will look more at what the central bankers have to say in the coming days not just in India but in many parts of the world. The RBI will meet with bankers and announce its First Quarter Review of Monetary Policy Statement tomorrow.

The Federal Open Market Committee is expected to release a statement on Wednesday after a two-day meeting. The European Central Bank and Bank of England also meet this week.

The opening is set to be weak to begin with. The market may trade in a range ahead of the policy meet. Investors will be keen to hear about when some of the measures taken by RBI may be reversed. There are no indications of these happening in a hurry given the mixed data emerging on the economic front.

Besides results like Sesa Goa and Colgate Palmolive which will be announced today, Wipro and HUL will also be in focus. Wipro announced a PAT of Rs16.23bn, up 3% QoQ. The net sales for the quarter is at Rs97.33bn.

A lot of attention could be on the FIPB meet which will consider 32 FDI proposals, including Jet-Etihad deal. Jet is also set to take off on reports of the deal going through. Meanwhile, Sebi has reportedly stated that Jet Airways and Etihad Airways should enter into a Commercial Cooperation Agreement only after culmination of the Shareholder Agreement as the former appears to give an "upper hand" to Etihad on commercial matters and was also one of the conditions for making investments.

US stocks ended marginally higher on Friday. Asian markets are weak. Japan's Nikkei 225 is down over 2% while Hong Kong's Hang Seng index is 0.7% lower. South Korea's Kospi index is marginally down while China's Shanghai index was trading over a percent lower.

Emami Ltd could be in action on reports that it is scouting for acquisitions to strengthen its market position.

Samsung Electronics Co Ltd sold 76 mn smartphones in the second quarter, according to Strategy Analytics.

Results watch: Sesa Goa, Colgate Palmolive, Ajanta Pharma, MCX, Merck, IDFC, Network18 Media, 3I Infotech, ESHAMEDIA, Bharti Infratel, Allahabad Bank, Arvind, ASM Tech, Ahmedabad Steel, Banco Products, City Union Bank, Indian Bank, Gujarat Auto, JPINFRATEC, Jay Shree Tea, MAH HOLIDAY, Madras Cements, Jindal South, Geometric, Marksans Pharma, Morarjee Tex, NEPC Textiles, Patspin India, Prestige Estates, Ramco Systems, Sakuma Exports, Shantivijay Jew, Soma Textiles, Syndicate Bank, Subros, TECIL Chemicals, Tinplate Co, TV18 Broadcast, Ushdev Intl, Welcure Drugs, Zenith Fibres, Zuari Agro, Ushdev Intl.

Trends in FII flows: The FIIs were net buyers of Rs2.78bn in the cash segment on Friday, while the domestic institutional investors (DIIs) were net sellers of Rs4.89bn, as per the provisional figures released by the NSE.

The foreign funds were net buyers of Rs3.68bn in the cash segment on Thursday, according to the SEBI figures.

Global Data Watch: Bank of Japan Governor Kuroda Speech JPY, BoJ's Governor Toshihiko Fukui Speech JPY, Business Confidence (Jul) EUR, M4 Money Supply (MoM) (Jun) GBP GBP, M4 Money Supply (YoY) (Jun) GBP, Mortgage Approvals (Jun) GBP, Net Lending to Individuals (MoM) (Jun) GBP, Consumer Credit (Jun) GBP, Producer Price Index (YoY) (Jun) EUR, Wage Inflation (MoM) EUR, Wage Inflation (YoY) EUR, CBI Distributive Trades Survey - Realized (MoM) (Jul) GBP, Pending Home Sales (MoM) (Jun) USD, Pending Home Sales (YoY) (Jun) USD, Dallas Fed Manufacturing Business Index (Jul) USD, Loan Officer Survey USD, 3-Month Bill Auction USD, 6-Month Bill Auction USD, Building Permits s.a. (MoM) (Jun) NZD, Jobs/applicants ratio (Jun) JPY, Unemployment Rate (Jun) JPY, Overall Household Spending (YoY) (Jun) JPY, Industrial Production (MoM) (Jun)Preliminar JPY, Industrial Production (YoY) (Jun)Preliminar JPY

In other news in the media:

Woodland is aiming to take its turnover to Rs10bn this fiscal as it expands its retail presence in the country and adds more products to its portfolio. (ET)

Dena Bank said it has sought Rs20bn capital infusion from the Central government to support its future loan growth as the tier-I capital of the Bank fell below 8 % by the end of June quarter, a top official said. (ET)

Tata Power has sought "certain waivers" from lenders to ensure further disbursements of loans to the 4,000 MW Mundra plant, the country's first operational ultra mega power project. (ET)

Tata Steel, has set its sights on the Indian iron ore assets of one of Britain's largest independent steel trading companies - Stemcor. (ET)

After securing approval of the Madras High Court, Vedanta Resources is now hoping to complete the much-delayed merger of Sesa Goa and Sterlite Industries within a month after getting a favourable verdict from the Bombay High Court as well, a senior company official said (ET)

The consortium of 27 banks has deferred plans to recast Rs 70bn loan extended to the troubled Electrosteel Steels due to differences over terms of the proposal, including fresh capital infusion and corporate guarantee that promoters are supposed to bring to the table. (ET)

Walmart has stopped its lobbying with US lawmakers on India-specific issues, after continuously seeking their support for about five years to facilitate its entry into the high-growth Indian market. (BS)

SpiceJet is in advanced stage of discussion with a potential investor for stake sale and expects the negotiations to be concluded soon. (BS)

The Odisha Power Generation Corporation (OPGC), a joint venture between the Odisha government and the US based utility major AES, has kick started its 2 X 660 Mw expansion project, comprising unit 3 and 4 of its 420 Mw Ib Valley power complex, with the issue of work order in favour of BHEL and BGR Energy Systems ltd. (BS)

Sundram Fasteners, plans to spend Rs1bn this year on expanding capacities and developing new products. (BL)

Lack of demand for electricity may impact viability of the upcoming 2X300 MW Chandrapur thermal power station of CESC Ltd. (BL)

The government has received a Rs17.7bn investment proposal from a domestic company for the manufacturing of telecom products.(ET)

Production of pulses might reach another record in 2013-14, as sowing of the crop this kharif season has been 80% more than in the same period last year.(BS)