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Indian stock market and companies daily report (January 07, 2013, Monday)

Contributed by Angel Broking

The Indian market is expected to open flat to negative tracking the flat opening in SGX Nifty. Most of the Asian markets are trading in the red.

US stocks moved mostly higher over the course of the trading day on Friday, although buying interest was somewhat subdued. The markets benefited from a positive reaction to the release of some relatively upbeat economic data. Most major averages finished the day in positive territory, with the S&P 500 reaching its best closing level since December of 2007. The European markets overcame their early weakness on Friday and ended the session in positive territory. The initial weakness was caused by indications that policymakers in the US would probably end their $85 billion monthly bond-purchase program before year-end. However, the markets recovered following the release of US jobs report for December, which was in line with expectations.

Indian shares recovered early losses to finish marginally higher on Friday, as gains in oil & gas as well as IT stocks outweighed losses in metal stocks amid speculation about an early end to FedRs.s quantitative easing.

Markets Today

The trend deciding level for the day is 19,754 / 6,006 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,828 - 19,871 / 6,031 - 6,045 levels. However, if NIFTY trades below 19,754 / 6,006 levels for the first half-an-hour of trade then it may correct up to 19,71 0 - 19,636 / 5,992 - 5,967 levels.

LIC Housing Finance plans to raise upto 71,000cr through ECB route

LIC Housing Finance is planning to raise a sum of Rs.700-1,000cr through External Commercial Borrowings (ECB) route. The Reserve Bank of India (RBI) had in last month allowed real estate developers and housing Finance companies to raise up to US$ 1bn through ECBs in the current fiscal to promote low-cost housing projects. As per the management, company belongs to the segment which has been permitted by the RBI. In our view, the ECB funding which the company has planned would be around 1.6% of total interest bearing liabilities and considering the interest rate differential associated with ECB funding compared to domestic borrowing, the benefit at the FY2014E PBT level would be nearly 3%. At CMP, the stock trades at 2.0x FY2014 ABV. We maintain our Accumulate recommendation on the stock with a target price of 7328.

Indraprastha gas raises price of CNG

Indraprastha Gas (IGL) has increased the price of CNG in Delhi by Rs.1.55/kg to Rs.39.9/kg due to increase in input costs. The company has been importing higher quantities of natural gas (which is expensive) due to shortage in domestic gas production. Since the increase in price will be offset by higher costs, we do not expect a material impact on the companyRs.s financials. We maintain our Neutral rating on the stock.

Economic and Political News

- India Inc confidence down in Oct-Dec: CII

- Non-corporates should get preference in bank licences: PMEAC

- Airlines wonRs.t have to fly on non-viable routes

Corporate News

- Mahindra plans to launch 300cc bike Rs.MojoRs. next fiscal

- Dr ReddyRs.s acquires 80% shares in OctoPlus

- Fuel Supply decision on AdaniRs.s Rs.25,000 cr Mundra power project today