Hoping to stay afloat! Indices to open weak

Action is at bottom a swinging and flailing of the arms to regain one's balance and keep afloat. - Eric Hoffer
 
The market is trying hard to maintain some balance. Though it manages few spikes intra-day and pares some losses, the indices are finding it hard to even close in the green. US Fed Chair Janet Yellen said what the market wished to hear. In her testimony said the Fed expects that with gradual adjustments in the monetary policy stance, economic activity will expand at a moderate pace in the coming years and that labour market indicators will continue to strengthen. Yellen says going by the strength in the US labour market, Fed was primed for 'gradual rate hike path' to achieve its two per cent inflation target.
 
The outlook is a weak start again. The Nifty has breached previous low of 7240 and has also closed below the same. We expect that index will shift to new zone on the downside and unless some bottom fishing happens aggressively, Nifty could slide towards 6889 in the near term.
 
Heavy-weight results are on tap including SBI, Tata Motors, ONGC, Coal India, Bharat Heavy Electricals Ltd, Hero Motocorp, Essar Shipping, Ashok Leyland, Bank Of India, BEML, 3I Infotech, Amtek Auto, A2Z Infra Engineering and Coffee Day Enterprises.
 
Asian markets are playing catch up on the downside as they opened after a break. Hong Kong is down over 3%, South Korea’s Kospi has dropped over 2%.
 
US markets closed in the red. The Dow Jones Industrial Average lost 99.64 points, or 0.6%, to end at 15,914.74 - its fourth straight day of declines. This marks the blue-chip index’s longest period of declines since Aug. 18 to Aug. 25. Weakness in Walt Disney Co., which hit a 52-week low, and IBM cut about 50 points from the Dow industrials. The S&P 500 index finished unchanged at 1,851.86.
 
Materials and Energy sectors led the losses, following a drop in oil prices. Only two of the S&P 500’s 10 sectors closed in the green: Healthcare was up 0.9% and Technology gained 0.4%. The S&P 500 is down 9.4% year to date. The Nasdaq Composite index advanced by 14.83 points, or 0.4%, to settle at 4,283.59.
 
Finland-based Nordea Fund acquired over 17 lakh equity shares of Reliance Infrastructure for Rs. 75.16 crore through an open market transaction. 
 
Bharti Airtel is in talks to merge its wholly-owned Sri Lanka unit into Dialog Axiata in a likely share-swap deal, two people familiar with the matter said.
 
Mylan NV said that it has agreed to buy Swedish pharmaceutical company Meda AB for US$7.2 billion in cash and stock.
 
Mukesh Bansal, who was handling the commerce and advertising operations at Flipkart, quit on Wednesday after a two-year stint.
 
Bansal would, however, be an advisor to the company, Flipkart said in a statement.
 
Some e-commerce companies will shut down in the next few months, Future Group’s Kishore Biyani was quoted as saying on Wednesday.
 
State Bank of India: SBI, the largest lender in the country, will announce its financial results on February 11 for the third quarter ended December 31, 2015. IIFL forecasts the bank's standalone net profit for Q3 FY16 to soar to Rs. 3,347.2 crore, growing at a rate of 15% yoy; however, it is likely to dip 13.7% qoq.       

Tata Motors: Tata Motors will announce its Q3 numbers today. IIFL forecasts the company’s net profit for Q3 FY16 to decline to Rs. 3,341.9 crore, at a rate of 6.7% yoy and 877.6% qoq.

Ambuja Cements: Ambuja Cements, major cement producing company in India, reported standalone net profit of Rs.109.96 crore for the quarter ended December 31, 2015, registering decline of 66.54% yoy.

Cipla: Cipla , global pharmaceutical manufacturers, reported consolidated net profit of Rs.343.20 crore for the quarter ended December 31, 2015, registering growth of 4.68% yoy, but decline of 20.42% qoq.

Petronet LNG: Petronet LNG reported standalone net profit of Rs.178.39 crore for the quarter ended December 31, 2015, registering growth of 9.85% yoy, but decline of 28.31% qoq.

Mercator: Shipping and logistics company Mercator said it has sold its Singapore bulk cargo business to three investors for a token amount of three Singapore dollars.

Shipping Corporation: Shipping Corporation of India Ltd posted a net profit of Rs. 596.60 mn for the quarter ended December 31, 2015 as compared to Rs. 313.50 mn for the quarter ended December 31, 2014.

Coal India: Coal India, the largest coal miner in India, will announce its Q3 results today. IIFL forecasts the company’s net revenue for Q3 FY16 to rise to Rs. 19,003 crore, growing at a rate of 7% yoy and 8.6% qoq.

MOIL: The company will invest Rs.620 mn for setting up a 10.5MW solar power project for captive use for mines in Madhya Pradesh and Maharashtra.

ACC: ACC Ltd posted a net profit after taxes, minority interest and share of profit of associates of Rs. 1023.90 million for the quarter ended December 31, 2015 as compared to Rs. 3262.20 mn for the quarter ended December 31, 2014.

Ruchi Soya Industries: The company’s standalone revenue stood at Rs. 8,185.29 crore, up by 41.68% yoy and 44.82% qoq.

DFM Foods: DFM Foods Ltd, maker of packaged snacks, reported standalone net profit of Rs. 6.59 crore for the quarter ended December 31, 2015, registering growth of 111.22% yoy.

Tata Global Beverages: The company’s consolidated revenue stood at Rs. 2,081.47 crore, down by 2.78% yoy but up by 2.31% qoq.

Sequent Scientific: Sequent Scientific  will announce its Q3 numbers today. IIFL forecasts the company’s net revenue for Q3 FY16 to soar to Rs. 177 crore, growing at a rate of 58% yoy and 11.3% qoq.

Shipping Corporation of India: The company’s standalone revenue stood at Rs. 987.04 crore, registering decline of 6.21% yoy and 9.03% qoq.
 
Kalpataru Power: Kalpataru Power Transmission, power plant major, reported standalone net profit of Rs.38.11 crore for the quarter ended December 31, 2015, registering decline of 7.03% yoy and 7.09% qoq.

AXISCADES Engineering Technologies: The company’s consolidated revenue stood at Rs. 97.65 crore, up 16.92% yoy and 2.01% qoq.

Asahi India Glass: Asahi India Glass Ltd, leading integrated glass company, reported standalone net profit of Rs. 25.53 crore for the quarter ended December 31, 2015, registering growth of 124.54% yoy and 13.97% qoq.

Engineers India: The company’s standalone revenue stood at Rs. 368.37 crore, down by 7.52% yoy and 18.24% qoq.
 
Glaxosmithkline Pharma: Glaxosmithkline Pharma reported standalone net profit of Rs.79.90 crore for the quarter ended December 31, 2015, registering growth of 76.38% yoy, but decline of 16.81% qoq.

Lakshmi Vilas Bank: Lakshmi Vilas Bank, one of India’s fast growing banks, announced reduction in the base rate from the earlier rate of 10.70% p.a. to 10.55% p.a.

Results: SBI, Tata Motors, ONGC, Coal India, Bharat Heavy Electricals Ltd,Hero Motocorp,Essar Shipping, Ashok Leyland, Bank Of India, BEML, 3I Infotech,Amtek Auto, A2Z Infra Engineering, Coffee Day Enterprises, Compucom Software, Diamond Infosystems, Dynacons Technologies, Ajmera Realty & Infra, Bafna Pharmaceuticals, Bgr Energy Systems, Bliss Gvs Pharma, Chennai Petroleum Corporation, Educomp Solutions, Hindustan Motors, Hinduja Ventures, Icra, Indraprastha Gas, I G Petrochemicals, IL&FS Transportation Networks, Indian Bank, Intellivate Capital Ventures, Jammu & Kashmir Bank, JMT Auto, Jaiprakash Power Ventures, Jaypee Infratech, Jubilant Foodworks, Liberty Shoes, Emami Infrastructure, Excel Industries, Gammon Infrastructure Projects, Hathway Bhawani Cabletel & Datacom, Natco Pharma, National Aluminium Co, NCC, Network, Novartis India, Oriental Bank Of Commerce, Page Industries, Pennar Industries, Prism Cement, Rajesh Exports, BGR Energy, Rupa & Company,Voltas and Wheels India.
 
Global Data: Chinese New Year CNY, National Foundation Day JPY, Eurogroup meeting EUR, Consumer Inflation Expectation (Feb) AUD, RICS Housing Price Balance (Jan) GBP, M2 Money Supply (YoY) (Jan) CNY, New Loans (Jan) CNY, Consumer Price Index (YoY) (Jan) CHF, Consumer Price Index (MoM) (Jan) CHF, 30-y Bond Auction GBP, Unemployment Rate (MoM) (Nov) EUR, Continuing Jobless Claims (Jan 29) USD, Initial Jobless Claims (Feb 5) USD, New Housing Price Index (YoY) (Dec) CAD, New Housing Price Index (MoM) (Dec) CAD, Fed's Yellen testifies  USD, EIA Natural Gas Storage change (Feb 5) USD, 30-Year Bond Auction USD, Food Price Index (MoM) (Jan) NZD, RBA's Governor Glenn Stevens Speech  AUD, Foreign investment in Japan stocks (Feb 5) JPY, Foreign bond investment (Feb 5) JPY
 
Trends in FII flows: The FIIs were net sellers of Rs.7.51 bn in the cash segment on Wednesday. The domestic institutional investors (DIIs) were net buyers of Rs.1.96 bn as per the provisional figures released by the NSE.
 
Other news of the day:
 
ITC unveiled three projects, two integrated consumer goods manufacturing unit at Howrah and an IT Park at Rajarhat near Kolkata, involving an investment of Rs30bn. (ET)
 
Tata Motors (including JLR) reported a 16% increase in global wholesales at 93,355 units in January. JLR sales were up 25% YoY while passenger vehicle sales were up 14% YoY. (BL)
 
NHPC is in talks with private firms such as Jindal Power, Lanco Infratech and Nagarjuna Construction to take over 4,600 MW of hydro power projects in Sikkim and Arunachal Pradesh. (ET)
 
Kalyan Jewellers announced its foray in the e-commerce segment and will offer gold and diamond jewellery on Flipkart. The products will be available from February 12, the company said in a statement. (BS)
 
MOIL will invest Rs620mn for setting up a 10.5MW solar power project for captive use for mines in Madhya Pradesh and Maharashtra. (BL)
 
Vodafone launched 4G in Mumbai on 1,800 MHz. (BS)
 
Britannia Industries is gearing up for a full-fledged play in the estimated Rs850bn Indian dairy market as part of its overall strategy to be a total food company. The company will seek board approval within a couple of months for its expansion in the dairy segment, which could entail a minimum investment of Rs3bn in the initial phase. (BS)
 
The Centre’s tax revenue had touched Rs10.66tn by January 31 or 73.5% of the full-year target. (BL)
 
IRDA chairman T S Vijayan said the caps and commissions and remunerations being given to insurance brokers will remain. However, the upper limit can be determined after taking the feedback from various stake holders. (BS)
 
India and Australia agreed on enhancing cooperation in clean coal technology, renewable power and LNG in a bid to meet the burgeoning demand for cheap and environment-friendly energy in one of the fastest growing emerging economies.  (ET)