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Indian stock market and companies daily report (December 26, 2013, Thursday)
Indian markets are expected to open flat tracking mixed opening in the Asian markets.
The US markets ended higher on Tuesday, with the Dow Jones Industrial Average and the S&P 500 rising to record closes, benefitting from an upbeat report on durable-goods orders. The strength on Wall Street was partly due to the release of a report from the Commerce Department showing that durable goods orders surged up by 3.5% in November following a revised 0.7% decrease in October. In addition, the new home sales fell by 2.1% to a seasonally adjusted annual rate of 464,000 in November from the revised October rate of 474,000. With the upward revision, the annual rate seen in October reflected the highest since July of 2008. Meanwhile, the European markets rose on Tuesday, extending four days of gains, although trading remained thin ahead of the Christmas break. On the economic front, reports indicated that the French economy shrank 0.1% quarter-over-quarter in the third quarter, confirming the preliminary estimates.
The Indian markets ended a volatile session lower on Tuesday ahead of the Christmas day holiday on Wednesday and the expiry of December series F&O contracts on Thursday. The rupee traded firmer for the third consecutive session, helping to limit the downside to some extent.
The trend deciding level for the day is 21,067 / 6,277 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 21,123 - 21,213 / 6,293 - 6,317 levels. However, if NIFTY trades below 21,067 / 6,277 levels for the first half-an-hour of trade then it may correct up to 20,977 - 20,920 / 6,253 - 6,238 levels.
RCom, Reliance Telecom allowed to exit USOF project
A law ministry's arbitral tribunal has allowed Reliance Communications (RCom) and its wholly-owned unit Reliance Telecom to exit from a Universal Services Obligation Fund (USOF) project under which mobile companies get subsidy to share mobile infrastructure and offer telephony services in rural and remote areas. The two companies have been allowed to exit from all non-implemented USOF sites across the country without any financial liabilities. However, they have not been given any compensation on the account of loss of business. The companies are not entitled to any damages or compensation in respect of expenditure occurred for purchase of RCom clarified that it will continue to shell out 5% of their annual revenues towards the USOF, just as other mobile phone companies do. In their pleas, the companies had asked to be discharged from contractual obligations and not be liable for penalties, as they felt that the project was not financially viable. The companies asked the arbitrator to direct USOF to permit them to exit from the agreement and claimed around Rs.3,300cr, apart from interest, as compensation.
The issue dates back to 2007 when a scheme was launched under the USOF to provide subsidy support for setting up and managing 7,871 infrastructure sites, or telecom towers, in rural and remote areas in 500 districts of 12 states. RCom and RTL had entered into an agreement with the USOF in June that year, under which they took responsibility for setting up nearly half of these towers. Under the agreement, USOF had to hand over ready sites by May 2008, which the fund did not do so for another 18 months, as per the companiesRs. claims. RCom and RTL then switched off over 1,400 telecom towers between November 16, 2010 and January 20, 2011, citing financial unviability, impairing mobile connectivity which was allegedly in breach of the shared mobile infrastructure norms. We maintain our Neutral rating on RCom.
BHEL wins contract worth Rs.1,023cr
BHEL has won a contract worth Rs.1,023cr from Neyveli Lignite Corporation for supply of turbine generator package at a thermal power project in Tamil Nadu. The scope of contract includes manufacture, supply, erection, testing and commissioning of steam turbine generators & auxiliaries along with associated civil works. BHEL already has the order for supply and installation of the Steam Generator package for the same project. We maintain Neutral rating on the stock.
Economic and Political News
- FCI raises Rs.20,000cr short term loan to meet cash needs
- RBI may reboot policy, focus on consumer inflation
- Sebi Board makes IPO grading optional
- Trai imposed Rs.50lakh fine on nine telcos for poor service
- Apollo Hospitals holding company buys shares worth Rs.87cr
- Bajaj Auto promoter acquires shares worth Rs.60cr
- Elder Pharma to focus on anti-infectives, international market
- India Inc raised Rs.4lakh cr in 2013; debt mkt most preferred
- MAHB plans to buy GMR's 40% stake in Turkish Airport
- Maruti eyes presence in 1 00,000 villages by March
- SAIL, RINL, MOIL to set up joint venture for ferro alloy plant
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