Money Sep 6, 2012
An absolutely sluggish and flat start to the Indian markets with the Sensex up only 3 points in opening trade and 16 components in the green. All eyes will be on Europe today and any positive development in the region will boost the morale of the investors across the globe.
At 9:25 am, the BSE Sensex was trading at 17,301, down 12 points over the previous close. The NSE Nifty was quoting at 5,224, down 1 points over the previous close.
HDFC Securities sees crucial support for the Nifty at 5208 and stiff resistance at 5300. It expects the market to take cues from Dow Futures & European markets during the latter half of the day. "Among the sectoral indices, metals, capital goods & banks look weak, while FMCG & IT could outperform," it said.
Infosys, Wipro, Maruti, ICICI Bank, ONGC, SBIL, HUL, Tata Steel are among gainers in BSE Sensex and Nifty.
RIL, TCS, Tata Power, Bharti Airtel, Sun Pharma, NTPC, L&T, HDFC Bank are among losers in BSE Sensex and Nifty.
Global investors have chosen to move on to the sidelines ahead of a crucial ECB policy meeting later today.A few economists expect the ECB to cut its main lending rate to 0.5% from 0.75%. Attention, however, is focused on bond-buying measures. Any ECB action will be linked to political developments. Plus, there are worries that Germany may turn out to be a party-pooper as far ECB's bond-purchase plan is concerned. The next six days of major event risks could potentially make or break the markets.
Domestically, UPA II's governance deficit continues to be a drag on the markets. The "coal-gate" remains a major overhang. With the economy on a downward spiral, lack of meaningful progress on market-friendly reforms will further dent investor sentiment.
Meanwhile, the oil ministry has proposed to the cabinet that diesel, cooking gas and
kerosene prices should be raised immediately after Sept 7 when the monsoon session of parliament ends that may also see a hike in petrol prices, a senior official in the ministry said.
The government said it is reviewing the tax treaty with Mauritius to prevent misuse and to strengthen tax information exchange mechanism between the two nations.
The auto companies are likely to get some relief on buzz that the government may not go for slapping an additional tax on diesel cars instead it is thinking of hiking the prices of diesel to generate revenues. However, the gloom in the two-wheeler sector is likely to weigh on the companies as sales of two-wheelers fell for the first time in 42 months in August due to a combination of surging petrol prices and high interest costs.
Stocks in news
BHEL was downgraded by Morgan Stanley yesterday; the stock is down 1.7 percent, after losing 5 percent in trade yesterday
State Bank of India yesterday cut interest rates on deposits by as much as 100 basis points across maturities to maintain profitability after lowering lending rates recently. Deposits with maturity of up to one year will yield 6.5 percent, down from 7.5 percent, and all deposits above one year maturity will be paid 8.5 percent. The stock is marginally up by 0.41 percent.
Axis Bank rose 0.8% as the research firm Nomura has put a buy rating on the stock with a target of Rs 1200. "The bank hasn't seen any signs of higher stress in any particular sector but has indicated that there might be some lumpiness in corporate restructuring," says Nomura report.
Jindal Steel and Power (JSPL) has bought CIC Energy Corp of Canada for Rs 6.5 bn. In 2010, JSW Energy had offered Rs 25 bn for this company. CIC has coal mines in Botswana, Africa, with reserves of six billion tonnes. The stock is up 1.50 percent.
The Competition Commission of India (CCI) is looking into allegations of monopolistic behaviour in the cable landing station market. Nearly 85 percent of these landing points are owned by two players - Tata Communications and Bharti Airtel.
Maruti Suzuki expects to reach full capacity levels at its troubled Manesar plant by October, said Subir Moitra, Managing Executive Officer of Supply Chain. The stock is up 0.37 percent.
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