The News International Team
9:55 am Market outlook: Lower commodity prices are raising weaker demand concerns, says Sunil Garg, Head of Global Research at JP Morgan. However, he expects global GDP growth to rebound from 2.5-3 percent by next year. JP Morgan is currently overweight on India and China and feels a slight correction will present a good entry point. According to Garg, though Indian market has run very hard, he feels cyclicals are still attractive on valuations. Considering that there is headroom for monetary policy in India, he wants to play PSU banks and prefers domestic cycle over exports. He believes that even Chinese market has more legs to run.
9:40 am Market check: Selling pressure continues on Dalal Street. The Sensex is down 251.88 points or 0.9 percent at 27067.68. The Nifty slips 71.80 points or 0.8 percent at 8147.80. About 399 shares have advanced, 1209 shares declined, and 54 shares are unchanged.
Banks, metals and FMCG stocks bleed while IT stocks are gaining on weak rupee.
9:30 am Interview: Automotive parts maker Motherson Sumi Systems will acquire Germany’s Scherer & Trier in a deal worth Rs 283 crore . While the acquired company is not profit-making yet, it will be earnings per share (EPS) accretive from the first year itself, says Vivek Chand Sehgal, chairman, Motherson Sumi Group.
In an interview to CNBC-TV18, Sehgal says the acquisition is debt-free and another similar deal is on the anvil.The deal would further consolidate Motherson Sumi System’s “polymer business in Europe and North America”. According to a statement released by Motherson Sumi, “The German entity develops and manufactures extrusion profiles, moulded parts made of thermoplastics and hybrid components made of metal and plastic catering to Original Equipment Manufacturers like Audi, BMW, Diamler, Ford, GM, VW etc, along with other customers.”
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Global jitters drag Indian market in opening. The Sensex is down 144.74 points at 27174.82 and the Nifty slips 47.00 points at 8172.60. About 189 shares have advanced, 390 shares declined, and 36 shares are unchanged.
ONGC, GAIL, BHEL, Hindalco and ICICI Bank are laggards in the the Sensex. Among the top gainers in the Sensex are Infosys, Coal India, HDFC and Cipla.
The Indian rupee continues its decline as it breached 63 per dollar for the first time since January 28. It has opened lower by 31 paise at 63.25 per dollar against the previous day’s close of 62.94 a dollar. The Russian ruble rebounded from record lows it hit yesterday after the Russian Central Bank hiked interest rates to halt a collapse in its currency, while the backdrop of falling oil prices and concerns over global growth supported the safe-haven yen.
The Russian currency had tumbled over 50 percent against the dollar over the past half year on plunging oil prices and the west’s sanctions linked to the Ukraine crisis.
Ashutosh Raina of HDFC Bank said, “The global risk off sentiment continues due to declining oil prices with WTI hitting a low of USD 55/bbl. The global inflationary expectations have come off sharply and growth concerns are impacting the markets across asset classes.”
“Markets await the outcome of two day FOMC meeting starting today. The diversionary global growth prospects have resulted in USD gaining across board, particularly against EM currencies,” he added.
Global markets too are in the red with Asian markets heading lower in morning trade taking cues from a volatile trade on Wall Street. European market closed with deep cuts.
In other asset classes, the slide in crude prices continued with Nymex crude slipping to USD 55 per barrel, the lowest since May 2009. Brent crude too shed earlier gains to trade around USD 60. Gold fell more than 2 percent, after posting its biggest weekly gain in two months, as the dollar firmed before a Federal Reserve meeting that could provide clues on the timing of a possible interest rate rise by the US Central Bank.