Will Indian equities end the year with a bang?

Moneycontrol Bureau

With today being the first day of a new expiry session, last day of trade in 2011 is expected choppy for Indian equities. Here is a look at a few local and global cues that will affect the way market moves today.

Global cues

Wall Street saw a steady upmove yesterday, to end near the best intra-day levels, as better than expected economic data boosted sentiment. The S&P is now back in the green, up 0.4% for 2011 after yesterday's rally.

Europe too ended higher after a choppy session. Asian markets kicked off trade today in a cautious mood.

US weekly jobless claims jumped to 381,000 from the multi-month low of 366,000 posted for the previous week. It remained under the key 400,000 level for the fourth straight time, boosting sentiment.

Pending US homes sales for November increased by 7.3%, much higher than the 0.6% increase that had been generally expected. However, it is lesser than the 10.4% increase recorded in the prior month.

Business conditions in the US did not remain stagnant as depicted by the Chicago PMI index. The figures came in at 62.5 as compared to 65.6 in October.

Meanwhile, the long-term bond auction in Italy saw mixed results. The yield on 10-year Italian bonds fell from November highs, settling slightly below the market-sensitive level of 7%, but it failed to calm jitters over the country's ability to raise funds in the markets next year.

In the currency space, the euro pared its early losses against the dollar and recovered from 15-month lows to rise back above 1.29 against the dollar. The dollar index is trading around the 80 mark.

Crude continued to trend higher as gains in the stock market and traders' shortcovering helped shake off early losses caused by a rise in us crude stockpiles. Iran's threat to block oil shipments through the Strait of Hormuz is also supporting prices.

Gold, meanwhile, slumped to its lowest level in almost six months to near 1,540 dollars an ounce. The precious metal is still on track to end 2011 with a 9% gain, one of the top performers in the commodity complex.

Domestic newsmakers

The drama surrounding the Lokpal Bill reached a culmination at midnight with the government deferring the bill amidst chaos. The bill was not passed and the Rajya Sabha was forced to adjourn.

Bond prices fell in after noon trade yesterday on news that the government will announce a fresh borrowing programme on Monday. The 10 yr yield rose from 8.45% to 8.53%.

Godrej Properties has sold 49% stake in its arm developing the Gurgaon project to Sun-Apollo.

American depository share holders of Mahindra Satyam may face 42% withholding tax in India, reports the Hindu Business Line.

The GTL board has approved corporate debt restructuring plans. A committee to finalise debt restructuring terms was formed.

The Business Standard reports that Chennai Port rejected Mundra Port's Rs 3700cr bid due to disagreements over the profit sharing contract.

Market regulator SEBI may allow promoters to auction shares on exchanges and is said to have agreed to help the government meet its disinvestment target, reports the Economic Times.

Rural Electrification Corporation has cut its foreign currency convertible bond issue size to USD 500 million from USD 1 billion, reports the Business Standard.

The Economic Times reports that SAIL and Kobe is set to invest Rs 1500 crore in a joint venture to make iron ore nuggets.

IL&FS likely to invest Rs 200 crore in Indiabulls InfraEstate for an 8% stake, reports the Hindu Business Line

Finance Ministry sources tell CNBC-TV18 that there is a possibility of NPA norms for textile companies being eased. However, there is no question of debt restructuring for the beleaguered sector. The final eased NPA norms for textile companies are expected by mid-January.

The Tata Group has identified housing, education and EPC in the future to drive growth. It is targeting Rs 10,000 crore revenues by 2015 from EPC company Tata Projects, and aims to be one of India's top three housing developers with Tata Housing. It forayed into the education space with Tata Interactive Systems.

Air India's board yesterday gave the go ahead to issue preference shares worth Rs 7500 crore to its lenders.

Anisha Mappat
anisha.mappat@network18online.com