No short-term clarity yet

Watch for a breakout either below 17,000 or above 17,200

The Sensex has once again been unable to cross 17,200 and we should wait for a firm move on either side for clarity as to where the index is headed in the short term. Watch out for a breakout either below 17,000 or above 17,200. 

On Monday, the Sensex closed at 17,164.99, 1.63 points from the previous close of 17,166.62.

On Friday, the Dow Jones Industrial Average was up 13 points while the Nasdaq and S&P 500 remained flat. During the day, except for the Jakarta Composite, Nikkei and NZX50, all Asian markets ended in the red. Markets in China and Taiwan were also sharply down. Among European markets, the CAC 40, DAX and FTSE opened down in the range of 0.03%-0.18%.

Among index heavyweights, Tata Consultancy Services (TCS) was up 2.27%. Malaysia Airlines and TCS have sealed a five-year contract for end-to-end IT infrastructure services. TCS also paid an advance tax of Rs178 crore, compared to Rs53 crore in the year-ago period. Infosys gained 1.07%. Its advance tax outgo has doubled to Rs250 crore from the Rs125 crore it paid in the year-ago period.

Godrej Consumer Products Ltd was up 1.13%, after the company announced the acquisition of Tura from Africa's Tura Group. Tura is a market leader in personal care, manufacturing and distributing of soaps, moisturising lotions and skin-toning creams.

During the day, Transport Corporation of India shot up almost 20% on the news that it plans to de-merge its real estate and warehousing division. Among the smaller stocks, 20 Microns rose 13.5% on the news that it plans to double plant capacity and spend Rs50 crore on capital expenditure.

Magma Fincorp Ltd was up 5.32% after the Board approved the issue of 20,00,000 warrants convertible into equity shares to the promoters and/or promoter group on a preferential basis. The ratio of conversion of warrants to fully-paid equity shares will be 1:1. The warrants are convertible into shares within a period of 18 months in one or more tranches at a price not less than Rs250 per share of Rs10 each.

Banking stocks fell on fears that the central bank may raise rates to tame inflation. India's largest bank by net profit and branch network State Bank of India (SBI) fell 1.45%. Its Q4 advance-tax payment rose to Rs1,857 crore from Rs1,810 crore a year earlier. SBI chairman OP Bhatt recently said that the bank was looking at tapping the retail bond market next year with a 10-year issue, although the initial issue size may be as small as Rs50 crore-Rs100 crore.

The shares of Hindustan Construction Co Ltd fell 2% after the company approved the acquisition of a controlling stake in Karl Steiner AG, the
second-largest operator in the Swiss real-estate market. The company will acquire 68% stake via issuance of new shares in consideration for a CHF 35 million cash investment in Karl Steiner. Karl Steiner will use these funds for its Swiss operations, and the growth of the company’s core business in India’s booming residential and commercial construction market.

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