Indian stocks to open sideways: Thursday Market Preview

Corporate earning numbers and the weekly food inflation numbers will drive the market today

The domestic market is likely to open sideways on fears of the Reserve Bank of India hiking rates once again to control rising prices in its policy on 26th July. Also, corporate earnings and the weekly food inflation data will give some direction to the market as the day progresses.

On the international front, US markets closed lower overnight as the debt ceiling deadline offset good earnings reports. Markets in Asia were mostly lower in early trade on Thursday as the impasse over the US debt ceiling weighed on investors. Meanwhile, Germany and France have reached a common position on a second bailout for Greece in their effort to prevent the country’s debt crisis from spreading through Europe, officials said on Thursday. The SGX Nifty was down 6.50 points at 5,559.50 compared to its previous close of 5,556.

The market on Wednesday fell on high volumes, despite the fact that the US market was sharply up on Tuesday and Asian markets were in the green. Weak corporate earnings and a stock-specific event led the benchmarks lower. This apart, the comment by finance minister Pranab Mukherjee that inflation would remain high till December also weighed heavy on investor sentiment.

The market opened higher on a positive trend in the Asian markets this morning, ignited by hopes that the US debt impasse will end soon. The Nifty opened at 5,642, up 28 points from its previous close, and the Sensex added 102 points to start at 18,756. Realty, consumer durables, banking and auto sectors led early gains and the market touched its intra-day high in initial trade as the Nifty rose to 5,645 and the Sensex touched 18,766.

Lower-than-expected results by IT major Wipro pulled the stock down by over 3% in morning trade. The market gradually drifted into negative terrain in the mid-morning session, on selling pressure in the heavyweights.

The indices bounced back into the positive, but the gains were short-lived, as the market dropped southwards in noon trade following the finance minister’s warning on inflation. The market fell to the day’s low in the late session, after news that a large investor offloaded nearly half his stake in drug maker Lupin. The investor’s entire stake was valued at over Rs300 crore. At the day’s low, the Nifty lost 90 points from the day’s high to 5,555, and the Sensex fell to 18,474, down 292 points from its intra-day high. However, the market closed off the lows, the Nifty at 5,567, down 47 points, and the Sensex settled at 18,502, a decline of 151 points.

Wall Street closed lower on Thursday as the failure to broker a deal to increase the debt ceiling pushed the indices into the red a day after the markets’ best rally since March.

Among stocks, Apple Inc closed 2.7% a day after reported good quarterly earnings. United Technologies declined 1.8% as investors brushed its quarterly profit and focused on Boeing’s selection of a rival engine maker to upgrade its 737 model. Yahoo tumbled 7.6% as the most visited web portal missed earning expectations.

On the economic front, existing home sales unexpectedly fell to a seven-month low in June as cancellations of pending contracts soared, according to the National Association of Realtors.

The Dow fell 15.51 points (0.12%) at 12,571.91. The S&P 500 shed 0.89 points (0.07%) at 1,325.84 and the Nasdaq Composite lost 12.29 points (0.43%) at 2,814.23.

Markets in Asia were mostly lower in early trade on Thursday as the deadlock in the US over its debt ceiling worried investors.  Meanwhile, Germany and France have reached a common position on a second bailout for Greece in their effort to prevent the country’s debt crisis from spreading through Europe, officials said on Thursday. The development lifted banking stocks in the region.

The Shanghai Composite and the Hang Seng declined 0.25% each, the Nikkei 225 fell 0.12%, the Straits Times was trading 0.32% lower and the Seoul Composite tanked 0.48%. On the other hand, the Jakarta Composite gained 0.10%, the KLSE Composite added 0.07% and the Taiwan Weighted rose 0.08%.

 Back home, the government on Wednesday signed a loan agreement worth $315 million with multilateral funding agency Asian Development Bank (ADB) for the Karnataka State highway improvement project. The loan will help the government to rehabilitate and upgrade about 615 km of state highways, a finance ministry statement said.

User

Govt to tighten vigil on money transfer bureaux

The new norms would entail these entities to report even small transactions in the range of Rs10,000-Rs20,000 to both international and domestic destinations in the form of Suspicious Transaction Reports and Cash Transaction Reports to agencies like the Financial Intelligence Unit and the Income Tax department

New Delhi: The government is mulling to tighten reporting norms for international payment gateways and money transfer agencies after some transactions in small tranches of few thousand rupees were reported to be suspicious by law enforcement agencies, reports PTI.

The security agencies have expressed fears that such outlets were being used by militants for money transfers involving small amounts, sources said.

The new norms would entail these entities to report even small transactions in the range of Rs10,000-Rs20,000 to both international and domestic destinations in the form of Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) to agencies like the Financial Intelligence Unit and the Income Tax department.

The move follows a warning by intelligence agencies that militant groups were getting money in small amounts through foreign exchange bureaux, which have come up in every corner of the country.

The security agencies in their successive reports to the finance ministry have raised serious concerns over mushrooming of money transfer agencies, including some international players, who have their agents in various places.

Though Reserve Bank of India (RBI) officials said that permission had been given to companies to have agents and sub-agents like banks, post offices and important financial institutions, they were unable to give an explanation when questions were raised about the appointment of ‘sub-sub agents’ like grocery shop owners and travel agents by these firms.

Security agencies are apprehensive that militants were using such bureaux for bringing in money from abroad in small amounts to avoid detection and there was no mechanism in place to seek information from these exchanges and that there was no proper compilation of records.

User

Weakness in share prices to persist: Wednesday Closing Report

Nifty to find support at 5,500

The market today fell on high volumes, despite the fact that the US market was sharply up yesterday and Asian markets were in the green.

Weak corporate earnings and a stock-specific event led the benchmarks lower today. This apart, the comment by finance minister Pranab Mukherjee that inflation would remain high till December also weighed heavy on investor sentiment.

The market opened higher on a positive trend in the Asian markets this morning, ignited by hopes that the US debt impasse will end soon. The Nifty opened at 5,642, up 28 points from its previous close, and the Sensex added 102 points to start at 18,756. Realty, consumer durables, banking and auto sectors led early gains and the market touched its intra-day high in initial trade as the Nifty rose to 5,645 and the Sensex touched 18,766.

Lower-than-expected results by IT major Wipro pulled the stock down by over 3% in morning trade and this hurt the BSE IT index which was the top sectoral loser. The market gradually drifted into negative terrain in the mid-morning session, on selling pressure in the heavyweights.

The indices bounced back into the positive, but the gains were short-lived, as the market dropped southwards in noon trade following the finance minister’s warning on inflation. Mr Mukherjee said the rate of price rise would continue to be high between August and December, on higher prices of manufactured goods and fuel. This caused worry among investors that the Reserve Bank of India (RBI) could hike rates once again at its policy meeting next week in a bid to rein in prices.

The market fell to the day’s low in the late session, after news that a large investor offloaded nearly half his stake in drug maker Lupin. The investor’s entire stake was valued at over Rs300 crore. At the day’s low, the Nifty lost 90 points from the day’s high to 5,555, and the Sensex fell to 18,474, down 292 points from its intra-day high. However, the market closed off the lows, the Nifty at 5,567, down 47 points, and the Sensex settled at 18,502, a decline of 151 points.

The advance-decline ratio on the National Stock Exchange (NSE) was a negative 592:1139.

In the broader markets, the BSE Mid-cap index tanked 0.88% and the BSE Small-cap index declined 0.36%.

Apart from the BSE Fast Moving Consumer Goods index (up 0.24%), all other sectoral gauges ended in the negative. The top losers were BSE Power (down 1.73%), BSE Healthcare (down 1.71%), BSE Capital Goods (down 1.45%), BSE Auto (down 1.42%) and BSE Bankex (down 1.34%).

DLF (up 1.63%), ITC (up 0.93%) and Maruti Suzuki (up 0.09%) were the top Sensex gainers. The losers were led by Wipro (down 3.95%), Hindalco Industries (down 2.71%), Jaiprakash Associates (down 2.51%), Tata Power (down 1.98%) and Hero Honda (down 1.90%).

The major Nifty gainers were DLF (up 1.31%), Siemens (up 0.71%), ITC (up 0.69%), Hindustan Unilever (up 0.56%) and Infosys (up 0.17%). The top losers on the index were Wipro (down 4.14%), Hindalco (down 3.41%), Ranbaxy (down 2.59%), Jaiprakash Associates (down 2.51%) and Kotak Bank (down 2.31%).

Among the first quarter results announced today, Wipro, Polaris Software and RCF posted weak numbers, setting off concerns over Q1 earnings estimates.

Markets in Asia, with the exception of the Shanghai stock market, ended higher on optimism that the US will avoid a debt default. Encouraging earnings reports from IBM and Apple also supported technology stocks in South Korea with LG Display, Samsung SDI and Samsung Electronics settling higher.

The Hang Seng rose 0.46%, the Jakarta Composite gained 0.68%, the KLSE Composite advanced 0.45%, the Nikkei 225 surged 1.17%, the Straits Times climbed 0.98%, the Seoul Composite advanced 1.16% and the Taiwan Weighted jumped 2.13%. On the other hand, the Shanghai Composite lost 0.10%.

Back home, on Tuesday, foreign institutional investors were net buyers of stocks worth Rs293.29 crore. Domestic institutional investors, on the other hand, were net sellers of equities worth Rs226.92 crore.

Tata Motors today said that it would consider setting up manufacturing facilities in various overseas countries as it looks to expand its global presence. In its annual report for 2010-11, the company said it will also introduce more fuel efficient products and market those in both domestic and export destinations.

The home-grown auto major, however, did not provide any details regarding any possible new overseas location. The company’s stock declined 1.62% to settle at Rs968.05 on the NSE.

State-run mining giant Coal India has blamed early rains and inclement weather in the eastern region for it not being able to achieve the 98.7 million tonnes (MT) target in the first quarter. Already plagued by a plethora of problems like delay in green clearances for its projects that has hurt production in the face of an ever-widening demand-supply gap, the Maharatna company missed the April-June target by 2.4 MT. Coal India fell 0.64% to Rs367.50 on the NSE.

Gammon Infrastructure Projects has achieved the financial closure of the Paradip Iron Ore Terminal Project, which envisages construction and equipping of a berth to handle an annual throughput of 10 million tonnes of iron ore. The company has a 31% equity stake in Blue Water Iron Ore Terminal, the special purpose vehicle implementing the project. Gammon Infra rose 1.25% to Rs16.20 on the NSE.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)