Global markets are on pause mode as they await a concrete Greek bailout package and the US and our market remained shut due to public holidays. Read on for stock related cues and news...
Expectations of a second Greek bailout package left global markets hanging on Monday. US and our market remained shut due to public holidays.
In Europe, markets ended higher on expectations that Greece will get its second lease on life, courtesy the troika (EU,IMF, ECB).
My Big Fat ‘Greek’ Problem
All eyes are on Brussels where 17 EU finance ministers are edging closer towards approving a second bailout deal for Greece. However, there is no final decision yet and there are doubts over the sustainable debt level for Greece.
Reports suggest that both sides have closed in on a debt/GDP target of 124% by 2020. The outcome of the meeting will be announced in a press conference in a couple of hours.
Robert Prior Wandesforde of Credit Suisse thinks the fear is that by allowing Greece to default obviously sets the market thinking who is going to be next. “The whole thing just spirals downwards but at the end of the day it’s becoming clearer that this is going to unfortunately be the end result that they are pushing the ‘can down the road.”
Most Asian markets ended flat ahead of the deal announcement. Japan's Nikkei Stock Average added 0.3% and South Korea's Kospi Composite gained 0.2%. Some great news came in from China where the People’s Bank of China (PBOC) cut the RRR by 50 bps effective February 24, after confirming its easing stance to counter growth slowdown.
Currency & Commodity Corner
The euro rose on expectations that policymakers would approve Greece’s second trance of funds but risks over implementing the deal as well as a loose eurozone monetary policy outlook were likely to cap the currency's gains. The euro closed at 1.321 to the dollar with the delay in the deal announcement weighing. The dollar index closed at 79.1.
Brent crude prices rose to a nine-month high of USD 121.15 per barrel on geo-political tensions with Iran blocking supply to Britain and France and hopes of a Greek deal. Prices eased slightly to USD 120 per barrel in Asia trade. Meanwhile, JPMorgan Chase raised its 2012 price forecast for Brent crude by USD 6 to USD 118 per barrel on supply risks and rising economic growth. It also raised its forecast for 2013 to USD 125 per barrel, up from USD 121 per barrel.
Gold prices rose more than 0.5% as growing optimism that European leaders will sign off on a rescue deal for Greece lifted the euro and after China's central bank further loosened monetary policy.
Indian Market Outlook
The momentum is set to continue today as well when our market opens after a long weekend. On Friday, the Nifty closed at 5,580. FII’s continue to pump money with a total of Rs 14,600 crore flooding our system in February so far.
Stocks In News
Kingfisher ’s wings appear to be clipped, for now. After cancelling several flights over the weekend, Kingfisher Airlines CEO Sanjay Aggarwal will appear before the DGCA today to discuss flight restoration plans. The bad news for people travelling is that domestic fares rose 10-20% post KFA cancellations.
The government has categorically stated that Kingfisher will get no bailout and that banks will have to decide on how much money they can give the ailing carrier.
In a CNBC-TV18 exclusive, Vijay Mallya has said the company is not in a comfortable cash position and is requesting working capital from consortium bankers. Watch this stock to see which way it moves.
Essar Oil reported its third quarter result. The company reported a net loss of Rs 3,986 crore versus a profit of Rs 273 crore. This has been on account of exceptional losses of Rs 4,015 crore on sales tax benefit reversal. The company said they are mulling equity infusion to boost net worth, liquidity and expand refinery capacity to 20 million tonne by September.
Business Line reports that a 19% import duty is likely on power equipment for mega projects.
According to the Financial Express, Marico is looking to divest three non-focus brands and is seeking buyers for Camelia, Aromatic and Revive.
Allahabad Bank 's board will meet tomorrow to consider preferential issue.
Union petroleum minister Jaipal Reddy said that though a petrol price hike is painful, it's inevitable. He added that oil marketing companies (OMCs) could lose as much as Rs 1,50,000 crore in FY12.
The Department Of Telecom may challenge the TDSAT order that reduced the penalty imposed on five operators for failing to fully implement the directive to re-verify prepaid connections in Assam and North-East circles.
In a Times of India report, CAG said that Reliance Power received Rs 24,000 crore government favour.
Sun Pharma Advance Research plans rights issue, reports the Business Standard.
The Business Standard reports that the IRDA has frowned upon Punjab National Bank ’s (PNBs) plans to buy 30% in Metlife for Re 1.
Reliance Communication may use a single vendor to manage its USD 3 billion outsourcing contract for 5 years, says the Business Standard.
And Shriram EPC coverts dues of Jayajothi cements into equity, taking majority stake and is considering roping in Portugal’s Cimpor.
Syndicate Bank is looking to raise equity capital by issuing shares on preferential allotment to Government of India and LIC.
Thomas Cook says it hopes to complete its stake sale by Mid-2012 and looks to maintain its FY13 margin at current level.
Stocks in F&O ban include Alok Textiles, ABG Shipyard and IFCI.
READ MORE ON markets, nifty, sensex, global markets, us markets, PBoC, RRR, European markets, euro, dollar, brent crude, chelsea saldanha, Kingfisher, Vijay Mallya, Essar Oil, Marico, Allahabad Bank, petrol price hike, Department Of Telecom, Reliance Power, Sun Pharma Advance Research, Punjab National Bank, Shriram EPC, Syndicate Bank, Thomas Cook
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