Market Watch: Earnings by L&T, SBI; JSW Steel; inflation no

European Markets

Eurozone concerns continue to loom over the markets. European markets closed marginally higher after a late rally as the positive economic data from the US erased earlier losses. However, many investors remain cautious over the health of Spain’s banks and Greece’s political impasse.

The Greek president held talks with the smaller political parties to try and get them to agree on a coalition government. So far though no deal has been reached. But talks will continue today but if they fail, Greece will have to hold fresh elections. Earlier in the day the leaders of the three main parties abandoned their last week's attempts of forming a coalition with Alexis Tsipras, leader of the anti-austerity party Syriza, saying to join up with their pro euro rivals would be tantamount to a criminal act.

Across in Germany a crushing defeat for Angela Merkel's conservative party at regional elections overnight. According to exit polls her Christian Democratic Party won 26% of the votes in North Rhine-Westphalia down from nearly 35% in the previous election. Merkel's main rivals, the Social Democrats got about 39% of the vote, the Green Party 12%. Analysts say Merkel's loss could embolden her rival's anti austerity calls ahead of next year's general elections.

US Markets

The US markets faded in the final hour of trading to close flat, with major indices logging a second weekly decline, pressured by news of JPMorgan's trading loss and amid ongoing worries over the eurozone. The Dow logged its worst weekly drop this year. For the week, the Dow tumbled 1.6%, the S&P 500 fell 1.15% and the Nasdaq dipped 0.76%.

On the economic data front, consumer sentiment rose to its highest level since 2008 to 77.8 from 76.4 in April. Producer prices posted a surprising drop in April as energy costs declined.

Asian Markets

In the Asian markets, China is reacting positively after Saturday’s CRR cut after the data last week showed that the economy is slipping further. most markets in the region are green today morning.

Shanghai up 0.5%; Nikkei up 0.6%; Hang Seng up 0.3%; Straits up 0.3%; Kospi down 0.3%; Taiwan down 0.1%  

Currency & Commodity Corner

In the currency space, the euro slips to its lowest level in more than three months as European officials begin to weigh the prospect of Greece withdrawing from the currency union. The euro currently is below 1.29 to the dollar. The dollar index is holding above the 80 mark.

In commodities, crude prices slipped to below USD 112 per barrel levels on speculation that fuel demand may falter amid global growth slowdown concerns.

From the precious metals space, gold fell almost 1% on Friday following a weak euro. For the week, gold notched a 3.7% loss, the worst performance since the week of December 18 last year when it tumbled nearly 7%.

Indian Market

It was the first weekly close below 5000 for our market since the start of 2012. BSE's Sensex fell 538 points in the week to close at 16,292.98 points, while Nifty slid 157 points to end the week at 4,928 points. Shares of banks, IT firms and metal sector companies led the fall.

The all important April inflation numbers will be announced today. A CNBC-TV18 poll sees this number at 6.7%, a tad lower than the 6.89% for march.

In the telecom space, the TRAI sticks to its recommendations on 2G. The TRAI has told the Department of Telecom (DoT) that they will refarm 800 & 900 mhz band immediately and that the refarming will be done by invoking licence conditions. The single auction will be open for all and the existing telcos will pay for liberal use of spectrum. The new entrants can bid for four blocks of 1.25 mhz. This clarification came on JS Sarma's last day as TRAI chairman before he retired.

Stocks in News

The Bombay High Court asks Bombay Dyeing to hand over 65,000 square feet back to BMC and MHADA.  
 
Jai Balaji Industries eyes restructuring of its Rs 2,000 crore debt.
 
JLR places Rs 8,500 crore order with UK suppliers.
 
Suzlon counts on REpower to repay USD 566 million foreign bonds. The German wind turbine maker has shown better performance and is sitting on a cash pile of USD 247 million.

Speciality Restaurants IPO will open on May 16 and closes on May 18, with a price band Rs 146-155 per share. The issue size 1.17 crore of shares.

Bajaj Finserv mulls raising funds on Wednesday, May 16 likely via a QIP issue.

Result Impact

Thermax beat expectations in their fourth quarter results. Their profits came in 3% higher at Rs 130 crore. Their PAT was boosted by higher other income and lower tax expenses. Their other income gained 29% at Rs 27 crore.

However, disappointing numbers from Essar Oil and MTNL. Essar Oil posted a net loss of Rs 515 crore versus a profit of Rs 321 crore a year ago. Their sales came in net sales at Rs 17,514 crore versus Rs 13,315 crore. They posted an exceptional loss of Rs 295 crore.

For MTNL it is the 10th consecutive quarter of losses. For the fourth quarter their net sales come in at Rs 843 crore as against  Rs 852 crore quarter on quarter. They posted an EBITDA loss of Rs 764 crore versus loss Rs 358 crore.

Earnings to Watch

L&T and JSW Steel will declare their Q4 numbers today. According to a CNBC-TV18 poll, their revenues may see 22% growth year-on-year (YoY) on the back of decent execution of large order book. Watch out for order inflows as the company is set to miss its FY12 order inflow growth guidance of 5% YoY and higher depreciation and interest costs expected to depress JSW Steel's profits.

Other Results

Ashok Leyland, Adani Port, Adani Power, Eicher Motors, Orchid Chemical, IGL, Monnet Ispat, Cox & Kings, IVRCL, IVRCL Assets, Alstom T&D, Abott India, Chennai Petro, Everonn, Heidelberg Cements, Mcnally Bharat, HMT, Maharashtra Seamless, Uflex, Elgi Equipment’s, Global Offshore, Arshiya International, Arss Infra, Bartronics, Dwarikesh Sugar, Eveready, SREI Infra, KS Oils, Lovable, Marg, Hind Dorr, ITI, J Kumar Infra, C&C Cons, Varun Ind, Fedders Llyod, Ganesh Housing, Garware Poly, India Glycols, Gokul Refoils, Genus Power,  Asahi  Songwon, Asian Granito, Atlas Cycles, C&C Construction, J K Paper, Khemrock, Uttam Sugar, Veritas, Vardhaman, CCL Products, Deep Inds, Dolphin offshore, Goodricke, Hikal, Jindal Drilling, Maxwell , MVL, Nectar life, OCL, Onelife cap, Ruchi Infra, Saregama, SIL Investment, SKS Logistics, Swan Energy, Shri Lakhsmi Cotsyn, Usher Agro, Viceroy Hotel.

Chelsea Saldanha
chelsea.saldanha@network18online.com