Re recovers but Euro in trouble; Will Nifty go down?

European Markets

European markets provisionally closed at their lowest level since the start of 2012 led by a fresh slide in euro zone banks, after attempts to form a government in Greece failed. The Athex fell 3.6% to its lowest level in 22 years with Portugal’s psi also closing at 15 year lows. Yields, however, continues to rise. The Spanish 10-year bond yields are now at a five-month high while Italian 10-year yields are sitting at a four-month high. Europe Closing: DAX -0.8%, CAC -0.6%; FTSE -0.5%; Greece -3.6%; Italy -2.7%; Spain -1.6%. Data to Watch
- EuroZone Inflation
- Trade Balance Greece: New Elections
Nine days and six rounds of talks ended with Greece’s president issuing a statement saying the country's political parties have failed to reach an agreement to form a coalition government. Regardless of who is to blame for the breakdown in coalition talks, Greece will have to hold another general election most likely in mid-June. The latest opinion polls point to another hung Parliament but Alexis Tsipras, the anti-bailout, anti-austerity leader of the radical Left Coalition party is tipped to hold the reigns of power. US Markets
US markets faded in the final hour of trading to end in the red following news that Greek depositors withdrew 700 million euro from the nation's banking system after Greece’s politicians failed to agree on a coalition government. The S&P 500 closed at 3-month lows while the Dow logged its ninth loss in the last 10 sessions offsetting some decent economic data. US Closing: Dow -0.5% at 12632; S&P -0.6% at 1330.7; Nasdaq -0.3%.
Consumer prices were flat in April versus a 0.3% increase in inflation in March. Meanwhile, the Empire State Manufacturing Index jumped to 17.09 in May. Retail sales in April edged up 0.1% versus a 0.7% rise in March. Data to Watch
- US Housing Starts
- US Industrial Production
- FOMC Minutes
- US Building Permits Asian Markets
It’s red across the screen in Asia this morning. The Hang Seng is down 1.8%; Kospi is down 1.2%; Straits is down 0.8%; Nikkei is down 0.6%; Taiwan is down 0.6% and Shanghai is down 0.1%. Currency & Commodity Corner
In the currency space, the euro slumped to fresh four-month lows with investors expressing strong aversion to risk. The dollar index is on its longest winning streak ever, rising for the 12th straight session.
Nymex crude slipped below USD 94 per barrel levels for the first time this year. Also Brent’s premium to US crude pushed above USD 18 for the first time since April 16. Brent is currently holding above USD 112 per barrel levels. Gold slipped to fresh four-and-half month lows as the euro continues to lose ground to the dollar. Indian Market
And back home, the Nifty gained 35 points to close at 4,942 while the Sensex closed up 112 points. Stocks to Watch
Sources say Piramal Healthcare to announce strategic acquisition today. The company may acquire a US-based asset in the healthcare segment and that the acquisition value could be in the range of USD 600 million. Standard Chartered and Barclays are likely to be involved in the deal.
Watch out for Bharti Airtel and Axis Bank as they make an important announcement today. Varun Industries and a Hong Kong company call off their JV pact for a Madagascar oil block. Chettinad Cement’s board seeks shareholders okay for delisting. The delisting indicative price is at Rs 575/sh (CMP Rs 798).
Meanwhile, Videocon will raise USD 51 million via private placement of GDRs. Tata Motors reported April global sales at 87,377 units. Their total JLR global sales came in at 25,143 units. April global CV sales came in 8% lower at 38,008 units YoY.
In primary market action, Speciality Restaurants’ issue opens today. They have an issue size of Rs 171 - 182 crore and have raised Rs 26 crore via anchor investments. The issue proceeds will be utilised in development of new restaurants and repayment of portions of term loans of Rs 9 crore.
An institutional investor will invest USD 140 million at Prometheon Holdings (UK) Limited, a wholly owned subsidiary of Cox & Kings. Aditya Birla Nuvo came out with their Q4 numbers yesterday. With the proposal of Pantaloons in its kitty, the company is confident of bolstering it's presence in the branded apparel segment and sees an 80% increase in its revenue from its fashion segment in FY14.
Plastene India withdraws its IPO due to unfavourable market conditions.
Rakesh Jhunjhunwala buys 26 lakh shares at Rs 42/sh (1.7%) in Prime Focus. He holds 4.25% stake already. His stake goes up to 5.95% now.
The MSCI Index will be adding and deleting a few stocks with effect from May 31 on the Nifty. MSCI ADDITIONS
Global Standard Index
Cairn India, Bank of Baroda, Godrej Consumer MSCI DELETION 
Global Standard Index
Suzlon MSCI ADDITIONS
Small Cap Index
Corporation Bank & Page Ind MSCI SMALL CAP DELETION
Videcon & Shree Cements
Public sector banks will need as much as Rs 4.25 lakh crore over the next six years, thanks to the RBI's Basel-III norms. That's the estimate from the RBI. This money will be used partly to fund growth and partly to fund rising losses and restructurings.
Meanwhile, finance ministry sources say that the government believes that in order to manage the rupee it needs to turn around sentiment for higher capital flows. The central bank's intervention yesterday paid off. The rupee regained its footing after an initial fall to over 54, finally closing at 53.78 to the dollar. Result Impact
Pantaloon’s results were significantly below estimates on the bottomline due to higher than expected interest costs. Their third quarter net profit came in at Rs 12 crore versus Rs 50 crore year-on-year (YoY). Margins exceeded estimates by 30 bps. Earnings Results
Bajaj Finserv, Blue Star, Dish TV, Edelweiss Capital, JK Lakshmi Cem, Zee News and 3I Infotech. Chelsea Saldanha
chelsea.saldanha@network18online.com