India Market Outlook
Markets are expected to open on a positive note following yesterday's rally and supportive global cues. Crude oil prices jump above USD 50 a barrel. Technically, the supports are placed at 7860 and 7800 and resistances are at 8000 and 8100.
India Market News
Overall, market-wide rollovers of F&O contracts stood at 63% on Wednesday, which were in line with the average rollovers seen in the past three F&O series. Market-wide futures open interest stood at INR 867.7bn (against INR 887.0bn on Tuesday). Nifty futures rollovers stood at 57% on D-1, in line with the average rollovers seen in the past three F&O series.
Cabinet has approved the first-ever policy for the capital goods sector in the country that aims to triple the value of production of these goods to INR 7.5tn by 2025 and create more than 21mn jobs. The policy also envisages increasing exports to 40% of production from current 27%.
Larsen and Toubro's (L&T) Q4 FY16 earnings beat analysts' expectations on all counts. Consolidated profit rose 18.6% y/y to INR 24.5bn, driven by strong revenue and operational performance despite higher finance and tax cost. Revenue increased 18.3% y/y to INR 331.6bn on the back of good progress in project execution and more than 50% of revenue was contributed by infrastructure segment. With this the company achieved its full year topline guidance that was expected at 10-15%. The only disappointment was that the L&T's order inflow growth during the year fell short of expectations.
L&T has garnered fresh orders worth INR 1.36tn in FY16, including international orders of INR 439.6bn, against guidance of INR 1.55tn. In Q4, it has received orders of INR 433.3bn. EBITDA shot up 35.2% y/y to INR 48.6 and margin expanded by 190 basis points to 14.7% compared to year-ago period.
GAIL India Ltd reported a 38.7% y/y rise in Q4 FY16 net profit on the back of higher volumes of gas transmission and bigger trading margins. Net profit in Q4 FY16 at INR 7.7bn was higher than INR 5.1bn in Q4 FY15. The total turnover however fell 18.3% y/y to INR 116.3bn. Sales fell due to 15% y/y drop in petrochemicals prices and 38% y/y decline in LPG price realizations.
The Union Cabinet has waived off loans worth more than INR 90.8bn owed by Hindustan Fertilizer Corp. Ltd (HFCL) as part of a financial restructuring package for the public sector unit. The Cabinet has also approved transfer of 56 acres of ash dyke land of Barauni unit to Bihar State Power Generation Co. Ltd to settle dues of HFCL for faster revival of the unit.
Global Markets Review
Asian shares look set to extend their rally from 12-week lows on Thursday after renewed optimism on European banks' prospects and a rise in oil prices to near US 50 a barrel helped lift global shares.
In US markets energy stocks outperformed on the back of continued recovery in oil prices, which hit seven-month highs after the U.S. government reported a larger-than-expected drop in crude inventories.
Oil prices inched towards USD 50 a barrel in early Asian trade on Thursday, after U.S. government figures showed a sharper-than-expected drawdown of crude stocks last week as imports dropped. U.S. crude futures had risen 5 cents to USD 49.6 a barrel.
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