Nifty@5200: Stocks to keep on the radar ahead of RBI policy

Moneycontrol Bureau

It was a strong start to week for Indian equities yesterday, as key benchmarks extended their Friday rally to log over 500 points in two sessions.

Hopes of further stimulus from global central banks, mainly the US Federal Reserve and the European Central Bank, fuelled the rally. Some analysts say the street is also hoping for a surprise from the Reserve Bank tomorrow.

The Nifty closed tad below the 5200 level, up close to 100 points, and the Sensex surged 305 points 17,143.

RBI's macro-economic report released yesterday paints a gloomy picture for the economy. The central bank cut FY13 GDP forecast to between 6.5% and 7.2%, and noted an upside risk to inflation.

In a CNBC-TV18 poll, an overwhelming 90% of respondents see no interest rate cut. Experts are of the view the RBI is waiting for the government to move on curbing the fiscal deficit, which is also key to boost investment sentiment.

Meanwhile, an Empowered Group of Ministers on drought is set to meet today for the first time since 2009.  The EGoM, headed by agricultural minister Sharad Pawar, will discuss the rainfall situation across India with particular reference to states like Maharashtra, Karnataka, Rajasthan, Gujarat etc.

Stocks in News

Sources tell CNBC-TV18 that TCI has moved the Delhi High Court against Coal India and the government of India. It has raised the coal pricing and corporate governance issues in the petition.

Keep an eye out for Shree Cement today, which may be hit after the Competition Commission of India imposed a penalty of Rs 398 crore for violating the Competition Act, 2002.

In fund action, Rakesh Jhunjhunwala’s Rare Enterprises has bought 25 lakh Spice Jet shares at Rs 30.77 per share.

Earnings candidate today is JP Associates, which is expected to see a 6% growth in sales to Rs 3,335 crore and a 5% growth in profits. However, repayment and servicing of their large debt is a key concern for the company.

Also on the results radar today are Cipla, Hexaware and Titan.

The Economic Times reports that Bharti Airtel is planning to issue new shares to the public or qualified financial institutions (QFIs).

The Financial Express reports that the Supreme Court has asked Mahanadi coalfields to supply 2.8 lakh tonne coal to Jindal Stainless’ plant in Orissa.

The Economic Times reports that Reliance Power has gotten USD 150 million loan from Standard Chartered for it’s UP based power project, reports the Economic Times.

Global Markets

US markets closed slightly lower, giving up some early gains, after a tight day of trading. Volumes remained low as cautious investors decided to sit on the sidelines ahead of news from the US Fed and European Central Bank later this week.

The Dow closed flat at 13,073, while the S&P and Nasdaq lost around 0.5% each.

Meanwhile, European markets closed higher amid ongoing optimism for fresh measures from the ECB to fight the euro zone debt crisis.

Key markets closed around 1-1.5% higher, but it was Spain and Italy, gaining 2.8% each, that saw greater gains.

From the currency space, the euro slipped versus the dollar as investors refrained from taking on risk ahead of central bank policy meetings. The dollar index remained flat at 82.7 levels.

In commodities, Brent crude prices continue to hold above UD 106 per barrel following a fall in OPEC production and an expected drop in US crude stockpiles. From the precious metals space, gold prices continued to trade around USD 1620 per ounce.

Global Cues

It's going to be a key week for global markets with the Fed's two-day meeting beginning today. Analysts are split on whether the Fed will come out with more stimulus come Wednesday, which is when they make an announcement. Some believe chairman Ben Bernanke will likely wait for more evidence of a deteriorating US economy.

Investors will also be watching out for the ECB monetary decision on Thursday, especially after president Mario Draghi said he is ready to do everything possible to help out the eurozone.

Meanwhile, the leaders of the coalition government in Greece held a two hour meeting overnight to try and hammer off final details on how Athens can cut spending by 11.5 billion euro over the next two years. Reports indicate all sides plan to ask international creditors to give them more time to implement those cuts. Coalition talks are expected to continue in the next couple of days.

Anisha Mappat
anisha.mappat@network18online.com