Friday’s Market Preview: Subdued opening likely

Global cues point out to a subdued opening for the domestic market today as Wall Street closed marginally lower on Thursday on Chinese rate tightening concerns. Markets in Asia were mostly lower in early trade on Friday on speculations that China’s growth indicators would prompt policymakers hike rates further. The SGX Nifty was down 45 points at 5,677 from its previous close of 5,722.

Dish TV, ITC, Mahindra & Mahindra Finance, Edelweiss Capital, HCC, IFCI, BHEL, Indiabulls Finance, Reliance Industries and Tech Mahindra are among the companies that will announce their quarterly earnings today.

The market opened on a subdued note on Thursday on negative cues from global markets. Offloading by institutional investors pulled down the sectoral indices in early trade. The indices were range-bound, ahead of the announcement of the weekly food inflation numbers, which eased from the previous week. Select buying pushed some sectors higher. The market touched the day's low a little after noon and soon regained momentum, lifting the indices into the green. Choppy trade continued throughout the session and the benchmarks closed with modest gains.

The fall which began from 4 January 2011 seems to be losing strength. The Sensex rose 68 points to close at 19,047 while the Nifty ended 21 points up at 5,712. The market is now beginning to move in a non-directional way. Two down days will be followed by an up day and vice-versa.

The US markets closed marginally lower on Thursday as the decline across material and energy sectors came as commodities weakened on concerns over demand from China would taper down if new policy moves are announced after data showed its economy unexpectedly grew in the fourth quarter of 2010. However, earnings reports helped to trim the losses. Financials gained after a US representative Barney Frank said he’s ready to work with the Republican majority to initiate changes in a Federal Reserve proposal to cap debit-card “swipe” fees.

In economic data, the number of US workers filing initial claims for unemployment benefits fell by more than expected last week, sales of previously existing homes rose more than expected last month, and the index of leading economic indicators also improved more than expected. On the other hand, the Philadelphia Fed’s business-activity index slipped to 19.3 in January versus a 20.8 reading in December, a tad below economists’ expectations.

The Dow shed 2.49 points (0.02%) to 11,822.80. The S&P 500 slipped 1.66 points (0.13%) to 1,280.26 and the Nasdaq declined 21.07 points (0.77%) to 2,704.29.

Asian markets were mostly lower in early trade this morning as concerns about possible rate tightening moves weighed down on commodity stocks. Profit booking after the recent rise in stock prices also drove some benchmarks lower.

The Shanghai Composite was 0.04% lower, the Hang Seng fell 0.41%, the Jakarta Composite plunged 2.95%, the KLSE Composite declined 0.82%, the Nikkei 225 fell 0.87% and the Seoul Composite tanked 1.12%. On the other hand, Straits Times added 0.03% and the Taiwan Weighted gained 0.13%.

Back home, the Reserve Bank of India (RBI) on Thursday said that co-operative banks cannot give housing loans beyond 5 per cent of their total assets. Earlier, state cooperative banks and central cooperative banks were allowed to extend housing finance up to 10% of their total loans and advances. These banks, with exposure in excess of the new limits, have been asked to initiate steps to bring it down to the revised limits within six months.


Coal Regulatory Bill to be introduced in Budget session

The coal ministry today said it will introduce the Coal Regulatory Authority Bill in the forthcoming Budget session of Parliament. "The work on coal regulator is moving forward...We are hopeful that in this Budget session we will introduce the Coal Regulatory Bill," Union Coal Minister Sriprakash Jaiswal told reporters here. The Budget session begins on 21st February.

The proposed Coal Regulatory Authority Bill aims to regulate and conserve coal sector resources besides protecting the interests of consumers and producers. The Bill would facilitate standardised operational norms and establish benchmarks in safety standards, performance and productivity through adoption of best mining practices, reports PTI.

Mr Jaiswal, who has recently been promoted to the Cabinet rank, said guidelines and rules for the proposed competitive bidding for auction of coal blocks would also be finalised within a month and the bidding process is likely to begin from April.

"I am hopeful that within a month these rules will be finalised... And from April bidding process will start," the Minister added.

Earlier, the Coal Ministry had said that it was framing guidelines and rules for the proposed competitive bidding for auction of coal blocks.

The Parliament in August last year had passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2010, which paved the way for introduction of auction through competitive bidding for allocation of coal blocks to private companies for captive use.

To encourage greater transparency, the Bill seeks to replace coal block allocation done by a government screening panel with allocation of coal blocks through auction.

At present, an inter-ministerial screening committee, which includes representatives from concerned state governments, allocates coal blocks to private firms engaged in generation of power, production of iron and steel, and some coal washeries.


No proposal to hike diesel prices: Jaipal Reddy

New Delhi: New oil minister S Jaipal Reddy today ruled out any increase in diesel prices, even though oil companies are losing Rs7 per litre on sales of the transport fuel, reports PTI.

There is no proposal on the anvil for an increase in prices of diesel, Mr Reddy told reporters after taking charge of the new ministry.

Asked about deregulation of diesel prices, which Cabinet had said in June 2010, would take place in due course, Mr Reddy said, "I don't think anybody can take such long-term decisions."

He, however, indicated that there will be no roll-back of the price hikes in petrol seven times since its deregulation in June 2010.

The newly appointed minister said the three state-owned fuel retailers are expected to lose Rs72,000 crore in revenue this fiscal on account of subsidised fuel sales and his ministry will press for a reduction in customs on crude oil and excise duty on diesel, as was proposed by his predecessor, Murli Deora.

Mr Reddy, who moved from urban development to the oil ministry, got down to tackling the task straightaway with a brainstorming session with senior ministry officials today.

"This is not a new government... I am a new minister in the old government. I am morally and politically accountable for all the policies and decisions of my predecessor. They were collective decisions of the Cabinet," he said last evening.

With rumours doing the rounds that the Congress party brass was not happy with Mr Deora and his junior Jitin Prasada over last week's Rs2.50 per litre hike in petrol prices, Mr Reddy said spiralling international oil prices "was a challenge."

Despite last week's price hike-the seventh since June, oil firms lose Rs1.22 a litre on petrol. Besides, they lose Rs7 a litre on diesel, Rs366.28 on LPG and Rs19.60 a litre on kerosene.

The Congress heavyweight said decisions on such issues would be taken at the Cabinet-level.


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