Friday 26 July 2013

Sensex to open on a weak note

There is no peace of mind in the market as the August series sets in. Though the main indices have gained around 5% in July, the undercurrent remains negative. Crisil has stated that a third of the 11,500 companies it rates may not be in a position to service debt this fiscal as the RBI’s liquidity tightening to shore up the rupee stretches payment cycles.

Credit quality of corporates is likely to be weakened by slow growth in GDP, heightened currency volatility, and higher-than-expected interest rates, the Crisil report added.

That aside the market is expected to open flat today. It’s going to be action-packed as far as the results are concerned. Some may announce after market hours, which could be a new trend soon. Wipro, HUL and Nestle will be on investor’s radar on account of its numbers expected today. ITC, first-quarter profits grew 18% at its slowest pace in four years as India’s economic growth slowed.

A report states that HUL has seen a record number of bearish bets in the derivatives (F&O) market as the valuation, or price-to-earnings multiple (P/E), of the stock has climbed to an all-time high of nearly 45 times, making it one of the most expensive stocks on Dalal Street.

The rupee strengthened to a five-week high on Thursday. It closed at 59.11/12 per dollar compared with 59.13/14 on Wednesday.
US markets were marginally higher. Nasdaq gained 25 points led by a rally in Facebook. The Dow Jones rose 13.37 points while Standard & Poor's 500 Index added 4.31 points.
The yen rose to a two-week high versus the dollar. Asian shares are trading lower. Japan's Nikkei 225 is down 1.5% and Hong Kong's Hang Seng index has fallen 0.3%. South Korea's Kospi index is marginally lower and so is the case with China's Shanghai index.

Japanese consumer prices rose the most since 2008 in June. Reports indicate this could be a sign that the country is may be emerging from a period of deflation. China has directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end.

US regulator reportedly said that it reached an $885 mn settlement with UBS over allegations the bank misrepresented mortgage-backed bonds that were sold to Fannie Mae and Freddie Mac during the housing bubble.
The initial claims for U.S. jobless benefits rose to 343,000 in latest week from 334,000 in the previous week, the Labor Department said.
Gold was steady after a 0.9% rise.

Ambuja Cements stock tanked to its 5-year lows after market participants got jittery over the stake sale deal that reeks of Ambuja's foreign parent walking away with the its cash holdings.

Maruti Suzuki India Ltd., the nation’s biggest carmaker by volume, reported first-quarter profit that beat analyst estimates after a weaker Japanese yen lowered import costs.

Special CBI court today has given exemption to Reliance Telecom, chairman Anil Ambani from appearing as a witness in the 2G spectrum trial till August 15.

Faced with over Rs. 11,200 crore tax liability, Vodafone India chief Analjit Singh on Thursday met Finance Minister P Chidambaram for the second time this week and expressed the hope that there will be clarity soon on the proposal to settle the dispute through conciliation.

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