Views on markets today
- Indian markets continued its winning streak for fifth straight sessions and closed on positive note yesterday tracking firm global markets. Reliance Industries gained a day before its quarterly earnings, while Infosys rallied after healthy U.S. earnings improved confidence in global IT spending. Power equipment makers such as BHEL also rallied on hopes the government would impose import duties, while hopes for policy reforms boosted sectors expected to benefit such as airlines. BSE Sensex jumped 93.84 points or 0.55%, up close to 35 points from the day’s low and off about 40 points from the day’s high.
- Data showing sustained buying of Indian stocks by foreign funds this month also boosted sentiment in the markets. Foreign institutional investors bought shares worth a net ’5,011Cr from the secondary equity markets this month till 18 July 2012.
- Maruti Suzuki India lost almost 9% after the company stopped production at its Manesar, Haryana factory on Wednesday after labour unrest resulted in the death of one person and at least 40 people being injured. Hero MotoCorp also dropped after the company said at the time of announcement of first quarter results that consumers in rural and upcountry markets could postpone buying of motorcycles if the monsoon remains weak. While Kotak Mahindra Bank dropped as the bank’s ratio of gross non-performing assets rose to 1.6% of gross advances as on 30 June 2012 from 1.56% as on 31 March 2012.
- Market breadth was positive at ~1.17x as investors bought large cap stocks. On provisional basis, FIIs bought equity of ’1.26bn while domestic institutions sold equity of ’2.29bn in cash segment.
- Asian stocks mostly fall today, as the trader book their profits made during last sessions.
- We expect a flat opening for the Indian markets, as negative Asian markets may countered by capital goods stocks after cabinet decided to impose 21% duty on import of power equipment.
Economic and Corporate Developments
- The cabinet has decided to slap 21% duty on imports of power equipment, mainly to protect domestic companies from cheap Chinese shipments.
- The cabinet also approved 17% hike in sugarcane price that mills pay to farmers to ’170 per quintal for 2012-13.
- Lanco Infra in talks for ’23000Cr debt recast, if admitted to CDR, will be the biggest ever loan restructuring.
- Gayatri Projects to sell stake in power JV to subsidiary of JSPL for ’1400Cr
- RIL to bid for 2G spectrum across all circles in the coming auction.
- Global investors including Temasek, China Investment Corp to invest in RCom ‘s undersea cable unit, Global Telecommunication Infrastructure Trust.
- IOB seeks ’1500Cr capital from govt; $500mn MTN issue soon.
- Cadila Healthcare settles lawsuit with Somaxon over Generic Silenor.
- Lodha Developers set to buy DLF’s NTC land for ?2500-2700Cr
- Shanthi Gears open offer at ?81per share, offer opens on Sept 5, closes on Sept 18.
- Welspun Global open offer at ?42per share opens, issue opens on Sept 6, closes on Sept 20.
- Lloyds Steel open offer at ’11.65 per share, offer opens on Sept 6, closes on Sept 20.
US stocks extended gains into a third session Thursday as better-than-expected earnings from International Business Machines Corp. and other companies offset weak economic data. European progress on approving a Spanish aid package to banks also bolstered stocks.