Equity benchmarks closed flat with a positive bias amid consolidation Monday as investors awaited January retail inflation data due later today. Last batch of corporate earnings due this week and assembly elections of five states will also be closely watched.
The strength of the US dollar will decide the fate of the emerging markets (EMs), said Sanjeev Prasad of Kotak Institutional Equities.
Fed may hike rates at least twice this year if not thrice resulting in further strengthening of dollar and bond yields moving up. According to Prasad, this may expose the emerging markets and hence, advises EMs to depend more on fundamentals and be more careful about macro-related funds.
Infosys rose 1.6 percent as co-founder NRN Murthy has resumed talking to the board and says company Chairman R Seshasayee enjoys the “highest integrity”.
Prasad feels there is no major issue between the founders and management of Infosys. He, said, in fact, Infosys is well poised to make a transition in IT business environment. IT companies look attractive based on their valuations currently, he feels.
Public sector lenders were under pressure today, with Nifty PSU Bank down 3 percent dragged by Bank of Baroda that fell 10 percent on asset quality concerns despite management assured that slippages will be contained going forward.
Brokerage houses barring CLSA have underweight call on the stock. CLSA has retained its buy call on Bank of Baroda, with increased target price at Rs 225 from Rs 195, saying Q3 earnings missed estimates but stressed loans were below peers and bank is better than most PSU banks with respect to asset quality & capitalisation.
Idea Cellular shares declined down 2.7 percent after Q3 earnings disappointment and added negative was lack of commentary on merger with Vodafone.
Aluminium major Hindalco Industries gained 1.65 percent after it turned profitable in December quarter, with net income on standalone basis at Rs 320.56 crore against loss of Rs 32.49 crore in year-ago quarter, aided by strong operational performance as well as low base. Realisation drove revenue higher by 13.8 percent.
Metals stocks also gained on account of rally in base metals, with Vedanta up 3 percent. Copper prices surged to 2-year high and iron ore futures were at two and a half year high.
Mahindra & Mahindra, HUL, Wipro, NTPC and Tata Steel gained 1-1.6 percent while State Bank of India, Maruti, Tata Motors, Lupin, Hero Motocorp and ONGC were down 0.7-1.7 percent.
Ruchi Soya rallied 16.3 percent on signing agreement with Patanjali for refining & packaging of edible oils. Reliance Defence was up 0.9 percent as the company will undertake repair & maintenance work for US Navy.
The broader markets underperformed benchmarks, with the BSE Midcap index falling 0.4 percent on weak breadth. About 1,800 shares declined against 1099 advancing shares on the BSE.
European markets were higher, after another set of record closes on Wall Street and as investors eyed fresh data and digested new political developments. Asia closed higher despite geopolitical concerns over North Korea’s weekend ballistic missile test.