Cues that will decide if party on D-Street extends into Feb

Moneycontrol Bureau

US markets came off their worst levels but still finished narrowly mixed, after a handful of disappointing economic news weighed on the market. Despite the session's lackluster performance, the Dow and S&P still posted their best January since 1997. For the month, the Dow rallied 3.4%, the S&P500 jumped 4.36%, and the Nasdaq surged 8.01%. European markets too closed higher, but off the day's highs due to weak US data.

The Nifty closed just shy of the 5,200 mark yesterday, with a 110 point rally after the day before's decline. For the month, the Nifty gained 11%, making it the best monthly performance since September 2010. The Sensex gained over 330 points to close around 17,200.

The euro maintains its two day decline versus the dollar ahead of the Portugese bond auction. The euro is currently at 1.30 to the dollar.

In other asset classes, Nymex crude prices trade near one-week low as investors speculated that a weakening US economy and rising crude stockpiles indicate faltering fuel demand. From precious metals, gold posted its biggest monthly gain since August, up 11.5%.

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Global cues

Talks between Greece and private bondholders may wrap up today, said Greece's finance minister. Private sector investor losses could exceed 70%, but analysts say it isn't about the private deal anymore. Apparently, the final push seems to be for public sector losses. Central banks, including the ECB, are being pressured to accept losses on their Greek bond holdings to help Athens reduce its debt to 120% of the GDP by 2020.

In what is being termed as a victory for German chancellor Angela Merkel, 25 out of 27 EU countries have endorsed a fiscal pact pushed by Germany. The pact will ensure greater fiscal discipline in eurozone countries. The fiscal compact will lead to countries enshrining balanced budget legislation into their national law, with annual structural deficits capped at 0.5% of GDP.

US home prices fell 1.3% last November, according to S&P/Case-Shiller's 20-city composite index. Meanwhile, the consumer confidence posted an unexpected decline in January, dropping to 61.1 from an upwardly revised 64.8 in the previous month.

Facebook is expected to file initial paperwork with regulators today for a USD 5 billion initial public offering. They have hired five underwriters, with Morgan Stanley taking the lead role. The company is currently looking at a valuation of USD 75-100 billion, which would be one of the largest initial public offerings in US history.

Domestic newsmakers

Back home, auto companies will come out with their January sales numbers today. General trends signal slow growth across segments similar to last month. In the two-wheeler space, channel checks indicate that dealers are still holding high inventory.

Reliance buyback opens today and closes on January 19, 2013. The company would buy back up to 12 crore equity shares at a price not exceeding Rs 870 rupees.

CNBC-TV18 exclusive reports that HDFC has opened the book for 2 crore shares, and that the Carlyle group is likely the seller. The deal is expected to be executed today.

The Department of Telecom has issued showcause notices to five telecom companies including Airtel, Vodafone, Tata Tele, Reliance Communication and Idea for misreporting revenues. A special audit by DoT has found that these companies have been misreporting their revenues to avoid payment of licence fee to the government through revenue share.

The Economic Times reports that telecom operators are set to up tariff rates by 30% this year.

In an attempt to fast track power sector reforms and remove short term irritants, the Prime Minister's Office is holding a meeting today to look at fuel supply issues and other issues that have hindered capacity creation in this sector.

The Bombay High Court today disposed off Wockhardt's ad-interim application which sought an injunction on the bondholders from initiating a parallel suit in the UK for recovering the money due to them. However, Wockhardt can breathe easy for now because the court observed that the bondholders will have to serve a notice to Wockhardt, should they choose to initiate proceedings in the UK. Another takeaway from today's proceeding was the claim by the counsel of Wockhardt that the company had been paying back the bondholders through the installments, in adherence to the earlier court directives. Wockhardt was required to pay Rs 30 crores in its second installment by today.

Crompton Greaves' margins and bottomline came in significantly below street expectations. Profits were down 67% to Rs 77 crores. Analysts await management clarification on the sharp deterioration in international business margins in today's analyst meet.

The tops names to watch out for today in earnings central are Mahindra Satyam and Ashok Leyland. According to a CNBC-TV18 poll, Mahindra Satyam may see a mere 2.75% dollar revenues growth due to cross currency impact. Also, margins are seen flat as currency benefit will be offset by wage hikes. On the other hand, Ashok Leyland is expected to see a strong volume growth of 25% year on year

SAIL has said that it plans to enhance its hot metal capacity from 14 to 23.4 million tonne per annum.

As a relief to airlines, Indian Oil cut its jet fuel prices by up to Rs 2,136 per kilo liter.

Siemens board approves the merger of Siemens Power Engg. with self. The company will offer six shares for every 13 Siemens Power Engg. shares.

Anisha Mappat
anisha.mappat@network18online.com