The Indian market is likely to see a flat-to-positive opening today on the back of a mixed start by the Asian pack today. On the other hand, Wall Street closed with modest gains on Friday, boosted by quarterly numbers from the financial sector and a rise in retail sales. The SGX Nifty was up 1.50 points at 5,701.50 from its previous close of 5,700.
The market closed with marginal gains in the week ended 21st January on positive earnings sentiment. However, volatility was the main feature as key heavyweights declared results—some beat market expectations while others were punished for poor performance. Weekly food inflation numbers eased from the previous week, but did not impact the market as the prices of vegetables are still high.
The sharp market decline that started on 4th January has not stopped. Over the last one week the Sensex actually ended 1% up (147 points) from the closing of 14 January 2011 (18,860). When the market stops falling, it rallies. But whether the fall has stopped or not will be known by early this week.
The week will have only four trading days as the domestic market will be closed on Wednesday for India's Republic Day. Other major events that could influence trading are the Reserve Bank of India's review of monetary policy on Tuesday and the expiry of futures and options contract on Thursday that will extend volatility into the next week. Corporate results will also share the limelight.
Markets in Asia were mixed in early trade on Monday. Japanese stocks rose following an upgrade in the rating of automaker Honda by Nomura Holding. On the flip side, markets in Malaysia and Taiwan were trading marginally lower on profit booking.
Meanwhile, the Industrial & Commercial Bank of China (ICBC), the world’s biggest lender by market value, has agreed to buy a stake in Bank of East Asia’s U.S. operations. ICBC will buy 80% stake in Bank of East Asia’s US unit for $140 million, the two companies said in a joint e-mailed statement on Sunday.
The Shanghai Composite was up 0.10%, the Nikkei 225 gained 0.38%, the Straits Times rose 0.67% and the Seoul Composite added 0.06%. On the other hand, the Hang Seng declined 0.26%, the KLSE Composite fell 0.22% and the Taiwan Weighted shed 0.08% in early trade.
The US markets witnessed a decent a good bounce-back on Friday on the back of strong earnings announcements from financials and a rise in retail sales. JP Morgan reported that its income soared 47% in the fourth quarter. Further, the bank set aside less money to cover bad loans and said it expected to get a nod from the Federal Reserve to raise its dividend.
The Labor Department reported that consumer prices rose 0.5% last month, the largest increase since June 2009. However, 80% of the increase was due to higher gas prices, meaning that the risk of widespread inflation remains low. The National Retail Federation said on Friday that US retailers enjoyed their best holiday sales in six years, rising 5.7% for a total of $462 billion in sales over November and December.
The Dow advanced 55.48 points (0.47%) to 11,787.38. The S&P 500 index added 9.48 points (0.74%) to 1,293.24, while the Nasdaq rose 20.01 points (0.73%) to 2,755.30.
Back home, financial regulators—the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI)—have enhanced vigil on Indian entities routing their funds from secretly-held Swiss bank accounts to India through Dubai and other locations, on fears of getting exposed for stashing the money in the European nation.
The stepped-up vigil for money laundering activities by the country’s two financial regulators comes in the midst of suspicion that there could be some Indian entities in the list of over 2,000 Swiss bank accounts that are expected to be disclosed soon by whistle-blower website Wikileaks.
Domestic brokerage firm Edelweiss Capital today reported 16.27% growth in consolidated net profit to Rs62.30 crore for the third quarter ended 31 December 2010.
The firm had posted a net profit (after minority interest) of Rs53.58 crore for the December quarter of the 2009-10 fiscal, Edelweiss said in a filing to the Bombay Stock Exchange.
Total income of the company rose to Rs444.74 crore in the third quarter of FY'2011 from Rs230.21 crore in the corresponding period of 2009-10.
Dhanlaxmi Bank said that its net profit for the third quarter ended 31 December 2010 increased by 447% to Rs7.3 crore, from Rs1.3 crore for the corresponding period previous year. The improved performance was driven by growth in non-interest income and overall growth in business.
The bank plans to raise equity capital of up to Rs1,000 crore by issue of equity shares not exceeding 5.5 crore equity shares of face value of Rs10. The equity issuance will be made to augment the Tier I capital base of the bank. The bank will use the capital to support its business growth and expansion plans while further strengthening its capital adequacy ratio.
The bank’s total business grew by a robust 76.1% to Rs18,303 crore from Rs10,393 crore as on 31 December 2009. The bank’s loan book witnessed a sharp growth largely due to greater thrust on the retail segment and diversification across regions. Total advances and total deposits continued to rise during the quarter registering a year-on-year growth of 77% and 76% respectively.
The bank’s total income increased from Rs156 crore in Q3FY10 to Rs283 crore for the same period this year, recording a growth of 81%.