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Indian stock market and companies daily report (March 21, 2013, Thursday)

Contributed by Angel Broking

Indian markets are expected to open flat to positive tracking positive opening in most of the Asian markets, backed by better than expected manufacturing data from China with its PMI index for March coming in at 51.7 from 50.4 in February.

US stocks ended higher over the course of the day yesterday after the Federal Reserve said it would continue to support the US economy. The FOMC decided to keep the target range for the federal funds rate at zero to 0.25% and said it would continue its asset purchase program at a pace of US$85bn a month. In his subsequent press conference, Federal Reserve Chairman Ben Bernanke expressed confidence in the economic recovery but indicated that the central bank would maintain its quantitative easing program for the foreseeable future. Also, market gained early strength as CyprusRs. parliament rejected a proposed Cyprus European Union bailout plan that would tax bank deposits.

Indian markets extended losses yesterday on continued political uncertainty despite Finance Minister P Chidambaram dismissing reports of threat to the government in the aftermath of the withdrawal of support to the ruling UPA coalition by the DMK over the issue of alleged human rights violations of Sri Lankan Tamils. Worries about situation in Cyprus also kept investor sentiment subdued.


Markets Today

The trend deciding level for the day is 18,916 / 5,707 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,996 - 19,108 / 5,732 - 5,770 levels. However, if NIFTY trades below 18,916 / 5,707 levels for the first half-an-hour of trade then it may correct up to 18,805 - 18,725 / 5,669 - 5,644 levels.


Fed to stay firm on stimulus push

In its Federal Open Market Committee (FOMC) meet, the Federal Reserve decided to stay firm on its asset purchase program to stimulate the economy. The FOMC decided to keep the target range for the federal funds rate at zero to 0.25%. The Fed decided to maintain the bankRs.s holdings of longer-term securities at US$85 billion each month. It seeks to support the economic recovery by putting downward pressure on longer-term interest rates, supporting mortgage markets, and easing broader financial conditions. The committee reiterated its commitment to pursue an accommodative monetary policy stance Rs.at least as long as the unemployment rate remains above 6-1/2 percentRs.. At the same time, it is also likely to rely on inflationary pressures and inflation expectations. Global markets rebounded, comforted by the FedRs.s stance.


CCI clears five oil and gas blocks

Cabinet Committee of Investments (CCI) has cleared the exploration and developmental activity of contractors including Reliance Industries, Cairn India and ONGC. Although US$10bn investments were made in these blocks, the blocks could not commence work due to inter-ministerial differences. The cleared blocks include areas of KG-D6 block and gas discovery area NEC-25 along with 3 other areas. We now await further clarity from company Managements regarding the exploration and production timelines from these blocks. Until then, we maintain our Neutral rating on RIL and Buy ratings on ONGC and Cairn India with target prices of Rs.357 and Rs.383, respectively.


Sadbhav Engg has bagged Rs.382cr order from NHAI

Sadbhav Engineering has been declared the successful bidder by National Highways Authority of India (NHAI) for widening of an 80-km stretch of Karaikudi-Ramanathapuram section (NH-210) in Tamil Nadu. The estimated total cost of the project is Rs.382cr and has a concession period of 15 years, which includes 224 months of construction period. We continue to maintain our Buy rating on the stock with a target price of Rs.157.


Economic and Political News

- FDI up 8% at US$2.2bn in January, 2013

- FII limit auctioned for Rs.11,000cr for government bonds

- India to install 1300-1400 MW solar power in 2013

- No plans to move no-confidence motion against government: BJP

- Outbound deals of Indian companies at US$11bn in 2012

- Telcos need Rs.90,000cr capex for 100% teledensity in villages by 2020: E&Y-Assocham


Corporate News

- Bharti Airtel launches 4G services in Chandigarh, Mohali and Panchkula

- IDBI sells US$500mn bonds in global markets, to pay 3.75% coupon

- Labour trouble brewing at Tata Tea plantations

- SAIL OFS to hit market on March 22, 2013

- VideoconRs.s D2H arm gets Sebi nod for Rs.700cr IPO