“I am very bullish on corporate credit”

Chanda D Kochhar, managing director and CEO of ICICI Bank, spoke to Moneylife’s Sucheta Dalal...

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Thursday’s Market Preview: Global cues point out to a positive opening

Global cues point out to a positive opening for the Indian market today. The US markets closed with splendid gains overnight on good economic data from within the country and from across the world. Markets in Asia were trading higher as positive economic news from the US, a sign that the region’s economy process is on track. The SGX Nifty was 52 points higher at 6,034 compared to its previous close of 5,982.

Weekly food inflation data will be announced by the government around noon today, giving some direction to the market later in the day.

The market opened firm yesterday despite tepid cues from across the globe. Early gains were supported by metal and auto sectors. Manufacturing output for November, as measured by the HSBC Markit Purchase Managers' Index (PMI), which witnessed its fastest growth in six months, also supported the gains. The northward journey was marred by some retracement in the noon session. However, the indices resumed their upward climb in post-noon trade as the key European markets were trading in the positive zone. Finally, the Sensex closed the day 313.92 points (1.61%) higher at 19,835.17. The Nifty closed at 5,965.95, up 103.25 points (1.76%).

Wall Street closed higher on Wednesday on firm economic data and on signs of easing of the debt crisis in Europe. A report from ADP Employer Services showed businesses added 93,000 workers to payrolls in November, more than the 70,000 expected by analysts. The Institute for Supply Management said its factory index, a gauge of manufacturing, was little changed at 56.6 last month after a five-month high of 56.9 in October. A reading higher than 50 signals growth. The Fed’s “beige book” also indicated the recovery is strengthening in several key regions of the US.  Gains were also supported by positive economic data from China, Germany and the UK.

The Dow jumped 249.76 points (2.27) to 11,255.78. The S&P 500 surged 25.52 points (2.16%) to 1,206.07. The Nasdaq gained 51.20 points ((2.05%) to 2,549.43.

Taking cues from the economic data emanating from the US and from across the globe, the Asian pack was trading higher in morning trade. The markets also received support from signs of easing of financial troubles in the Eurozone. The Nikkei was up on assertions from the country’s finance minister that companies have enhanced spending, for the first time in three years.

The Shanghai Composite surged 1.17%, the Hang Seng gained 1.34%, the Jakarta Composite was up 1.32%, the KLSE Composite rose 0.84%, the Nikkei 225 jumped 1.78%, the Straits Times advanced 0.65%, the Seoul Composite was up 0.87% and the Taiwan Weighted gained 1% in early trade. The SGX Nifty was 52 points higher at 6,034 compared to its previous close of 5,982.

Back home, the Cabinet on Wednesday approved additional capital infusion of Rs6,000 crore into state-run banks to raise their capital adequacy and to increase the government's stake in them.

The government will use the funds to raise its holdings to 58%, a statement issued after a Cabinet meeting on Wednesday said. The funds are in addition to Rs15,000 crore of infusion provided for in the February budget..

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ONGC share split gets government nod: sources

New Delhi: The government today approved a share split in and issue of bonus shares by ONGC, the country's biggest oil and gas producer, as a prelude to the company's follow-on public offer (FPO) in March 2011, reports PTI.

According to sources, the Cabinet Committee on Economic Affairs (CCEA) approved splitting a share of ONGC with a face value of Rs 10 into two shares of Rs 5 each. It is also said to have approved a 1:1 bonus issue. However, no official statement was made till late this evening.

The state-owned ONGC had suggested to the government that the company's stock be split ahead of the FPO. The government plans to sell 5% of ONGC shares to mop up Rs10,800 crore through the FPO. Post the offer, government's shareholding in ONGC would come down to 69.14% from the current 74.14%.

Shares of ONGC closed up by 3.23%, or Rs40.30, at Rs1,288.50 on the BSE today.

ONGC had appointed two international auditors (DeGolyer and MacNaughton; and Gaffney, Cline & Associates) to certify its oil and gas reserves. The energy producer usually gets its reserves audited every five years, but decided to get a certification in the third year itself this time because of the FPO.

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