Anxiety could weaken sentiment
A crust eaten in peace is better than a banquet partaken in anxiety.
Looks like its time to give up some of the gains made in the past three days. The reason. A slowing US economy and the Federal Reserve that's still reluctant to cut interest rates saying that inflation is still a threat to the world's largest economy. Wall Street isn't happy about the disappointing reports and Asian markets too are down in the red this morning. Oil prices are hovering around the $62 per barrel mark. FIIs were net sellers yesterday as per the provisional figures from the NSE. Add the anxiety over tomorrow's Infosys results and we have a perfect recipe for a weaker opening than what we've seen in the last few days. The intra-day gyrations may continue, as investors are likely to remain cautious before the Big Friday. At best, the main indices may end up on a flat note. The worst case scenario is a slight fall. A big crash is unlikely unless global indicators crack a bit more.
Among the big results today include BILT and Rallis India. Orbit Corporation is going to be listed today. TCS could be in action amid reports that it is looking at an overseas listing. Sesa Goa is also expected to attract attention. A financial daily says that the Aditya Birla Group is the frontrunner for Mitsui's majority stake in the iron ore producer. Great Offshore may hog some limelight amid report of a fresh feud among the Seth brothers over the control of the company. Polymed Medicure may gain amid reports that it is looking to launch its products in the US. JSW Steel could be in action as a financial daily reports it is in the race for Canadian steel maker Algoma Steel. Jet Airways and other airlines will remain in the spotlight ahead of the outcome on the controversial Jet-Sahara deal.
The Government will release the latest industrial production data at noon.
US stocks posted their first decline this month after the minutes from the last Fed policy meeting seemed to suggest that the central bank is unlikely to cut interest rates anytime soon.
General Motors, Wal-Mart and IBM led the Dow Jones Industrial Average to end its longest streak of gains since 2003. Citigroup and Bank of America sent financial shares lower.
Minutes from the Fed's last policy meeting added to concern after the IMF said that the US economy will expand at its slowest pace in five years. Fed officials said that higher borrowing costs may prove necessary as inflation remains a threat and gave no hint of a rate cut.
The Dow lost 89.23 points, or 0.7%, to 12,484.62, its first drop since March 28. The Standard & Poor's 500 Index slid 9.52 points, or 0.7%, to 1438.87. The Nasdaq Composite Index decreased 18.30 points, or 0.7%, to 2459.31.
US light crude oil for May delivery rose 11 cents to settle at $62 per barrel on the New York Mercantile Exchange, giving back bigger gains accrued after the government reported a big drop in gasoline supplies. The front-month contract was quoting 7 cents down at $61.94 a barrel in extended trading in Asia.
COMEX gold for June delivery rose 20 cents to $681.70 an ounce. Treasury prices fell, raising the yield on the 10-year note to 4.73% from 4.72% late on Tuesday. In currency trading, the dollar fell versus the euro and the yen.
European shares turned lower, after the IMF lowered its global growth forecasts and investors waited from a speech by Federal Reserve Chairman Ben Bernanke. The pan-European Dow Jones Stoxx 600 index closed down 0.1% at 382.19. Earlier in the day the index hit a high not seen since November 2000, of 384.47, as the oil and gas sector set the pace by rising 1.1%. Among other indexes, the UK's FTSE 100 closed down 0.1% at 6,413.30, the German DAX Xetra 30 lost 0.2% at 7,152.83 and the French CAC-40 fell 0.3% to 5,751.92.
Asian stocks fell this morning from a six-week high following the release of the minutes from the last Fed meeting. Toyota and BHP Billiton led declines among companies that rely on US sales. The Nikkei in Tokyo was down 143 points at 17,526 while the Hang Seng in Hong Kong was down 24 points at 20,425. But, the Kospi gained 7 points at 1520.
HOW MARKET FAREDCautious opening likely
Markets ended on a flat note for second consecutive trading session ahead of IT major Infosys on Friday. After strong opening markets were unable to sustain their gains as low volumes were witnessed on D-Street. The Sectoral indices were mixed today as BSE Metal and Capital Good index ended with gains however, BSE Bank, Pharma and Technology index were on the receiving end. Cement stocks also were down today. Yet again the Mid-Cap and small cap indexes outperformed the frontline indices aiding the key indices to close flat with a positive bias. Finally, the 30-share benchmark Sensex was flat at 13183. NSE Nifty was up 15points to close at 3862.
PNB fell 1% to Rs446. The Bank announced that they have raised prime lending rates by 75 basis points to 13%. The scrip touched an intra-day high of Rs458 and a low of Rs445 and recorded volumes of over 2,00,000 shares on NSE.
Bharti Airtel advanced by 1.1% to Rs774 following reports that the company may invest in wireless-service providers in other emerging markets including Bangladesh and Sri Lanka, and bid for licenses in Africa. The scrip touched an intra-day high of Rs779 and a low of Rs763 and recorded volumes of over 7,00,000 shares on NSE.
Deccan Chronicle was locked at 10% upper circuit to Rs163.50 after the company increased advertisement Tariff by 30%. The scrip touched an intra-day high of Rs163.50 and a low of Rs151 and recorded volumes of over 1,00,000 shares on NSE.
Simplex Infrastructure jumped nearly by 8% to Rs381 after the company secured orders worth Rs7.08bn. The scrip touched an intra-day high of Rs384 and a low of Rs343 and recorded volumes of over 70,000 shares on NSE.
Mid-Cap stocks were the star performers of the day as the index gained %. Info Edge, Inox Leisure, Nagarjuna Construction and Polaris were gained over 4% each.
Firm metal prices on LME boosted the metal stocks. Index heavy weights Tata Steel surged by over 3% to Rs511, Hindalco spurred over 4% to Rs142, SAIL jumped by over 4% to Rs122 and Sterlite Industries zoomed over 6% to Rs506.
Banking stocks pared their intra-day gains towards the fag end of the session. Index heavy weight HDFC Bank lost 1.3% to Rs979 and SBI was down 1% to Rs981. Bank of India, Union Bank and PNB were among the major losers.
Pharma stocks were in poor health. Ranbaxy lost by over 3.5% to Rs345, Dr Reddy’s Lab declined 3% to Rs699, Sun Pharma was down 0.8% to Rs1089 and Wockhardt fell 1.7% to Rs404Market Watch
Market Volumes:
The turnover on NSE was down by 5.4% to Rs79.84bn. BSE Bank index was the major loser and lost 0.69%. BSE Pharma index (down 0.65%), BSE Technology index (down 0.14%) and BSE FMCG index (down 0.06%) were among the other major losers. However, BSE Metal index gained 3.68%.
Volume Toppers:
SAIL, IB Real Estate, Tata Steel, TTML, ITC, Hindalco, NTPC, Ashok Leyland, Arvind Mills, Idea, Nagarjuna Fertilizer, Rana Sugar, Satyam Computer, SRF, Punj Lloyd, Deccan Aviation and PFC
Upper Circuit:
Marksons, Nirlon, Swan Mills, Shree Precoated, Country Club, Garware Offshore, HOV Services, PBA Infrastructure, Marg Construction, Maxwell, Vakran Software and Atlanta
Results Today:
Ballarpur Industries and Rallis India
Delivery Delight:
ABB, Bajaj Hindustan, Bata India, BHEL, Bharti Airtel, Bombay Dyeing, Colgate, Cummins, DCHL, Gammon, HT Media, KPIT Cummins, ONGC, Orchid Chemicals, Reliance Capital, SAIL, Titan and Sterlite Industries.
Stock Futures with Largest Increases in OI:
UTI Bank, Voltas, Crompton Greaves, Kotak Mahindra Bank, Jet Air, HDFC Bank, SAIL and Dr Reddy's Laboratories.
Stock Futures with Largest Decreases in OI:
Federal Bank, Chennai Petroleum, Bajaj Hind, Sobha Developers, Indian Bank, Bata India, Tata Chem, Bombay Dyeing and Escorts
Brokers Recommendations:
Infosys, TCS – Buy from Goldman Sachs
Reliance Industries – Outperform from Macquarie
Long Term investment:
NDTV
Major News Headlines
Bharti Airtel adds 1.7mn mobile users in March
Gujarat Ambuja cement March sales at 1.48mn tons (down 4.5%)
Mastek Q3 profit at Rs235mn (up 28%), revenues at Rs2.14bn
ONGC approves Rs7.95bn additional spending on Gas fields
Elecon Engineering secures contract worth Rs2.29bn
Simplex Infra secures orders worth Rs7.08bn
Prithvi Info to consider interim dividend on 18th April
PNB, OBC, Syndicate Bank and Union Bank raise prime lending rates
Deccan Chronicle increases Ad Rates by 30%
GAIL, Indian Oil sign accord to sell Natural gas in West Bengal