India Market Outlook
Markets are expected to open on a subdued note with positive bias. The global cues are mixed while oil prices are trading with strength. Technically intraday supports are placed at 7440 and 7350 and resistances are at 7520 and 7600.
India Market News
L&T has decided to sell its casting manufacturing unit at Coimbatore to Bradken Limited for INR 1.6bn, said a media report. In an announcement to BSE, L&T said revenue of the foundry unit for the fiscal 2015 was INR 1.2bn and the percentage contribution of the unit by revenue and net worth is less than 1%.
Yes Bank's proposal to hike FDI limit was cleared by the Board, the source said. In November 2015, the government had removed sub-limit restrictions for foreign investments in private sector banks within the overall sectoral limit of 74%.
Strides Shasun Ltd has entered into an agreement with Sweden-based Moberg Pharma AB and its affiliates to acquire three over-the-counter (OTC) brands for USD 10mn (INR 670mn) plus inventory value. The transaction is expected to be closed within four weeks.
With key reforms such as the goods and services tax and the bankruptcy code likely to be taken up only in the second half of the budget session, the government is looking to push for the passage of the Aadhaar bill in the first half itself.
Coal-fired electricity generation increased by an impressive 12% y/y in February, which is the highest growth in the past 10 years. The growth has come on the back of capacity addition. Thermal power capacities have increased by about 11% y/y in the past year. Private sector power utilities and independent power producers commercialized more capacities, giving a fillip to generation.
Foreign exchange reserves as on February 26 fell by USD 3.6bn from a week ago to USD 346.8bn, according to data from the Reserve Bank of India. This is the biggest weekly decline in reserves since August 2014 when it had fallen by USD 3.8bn. Foreign currency assets (FCAs), which form a key component of the reserves, fell by USD 3.5bn from the previous week to USD 325.0bn.
Globally, iron ore prices (of 62 % ferrous content) shot up 19% to USD 63.74 a tonne (INR 4,270 a tonne USDINR 67) on Monday, taking 2016 YTD gains to 46%, exerting pressure on domestic producers like NMDC which has not revised prices since December 2015.
Global Markets Review
After rising to two month highs on Monday, Asian markets are trading with a cautious note on Tuesday morning. Japanese markets trade notably lower. Japan's economy shrank at an annualized 1.1% in the final quarter of last year, revised up from a preliminary reading of a 1.4% contraction, Cabinet Office data showed on Tuesday.
US Crude oil prices continue to rally amid signs that output from the U.S. is slowing. With lower than usual prices making the oil industry more cautious, the Energy Information Administration sees U.S. shale oil output falling by 106,000 barrels a day in April. April WTI oil climbed USD 2.0 a barrel, or 5.5%, to settle at USD 37.9/bbl. Brent crude oil too has settled to trade above USD 40/bbl.
U.S. stocks were mixed on Monday, with the Dow rising for a fifth consecutive session on gains in the energy sector.
Investment Strategy
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