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Sensex, Nifty flat; Tata Motors tanks 5%, Cipla gains 2.5%


The News International Team

09:55 am Big deal: Pharmaceuticals giant Pfizer Inc will acquire Hospira Inc, a leading provider of injectable drugs, infusion technologies and biosimilars, at a total enterprise value of USD 17 billion. This is Pfizer’s biggest acquisition after its failed USD 117 billion takeover bid for UK-based pharmaceuticals firm AstraZeneca in May last year. The Boards of Directors of Pfizer and Hospira have unanimously approved the merger, Pfizer said in a statement. Under the deal, Pfizer will pay USD 90 a share in cash for a total enterprise value of approximately USD 17 billion.

“The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS (earnings per share) growth in the near-term,” Pfizer Chairman and Chief Executive Officer Ian Read said. Coupled with Pfizer’s global reach, Hospira is expected to drive greater sustainability for Pfizer’s Global Established Pharmaceutical business over the long term, he added.

09:45am Bad loan? US-based Mirach Capital has backed out of its deal to arrange a loan and investments for the beleaguered Sahara Group, alleging breach of trust and weak financials, reports CNBC-TV18’s Ashmit Kumar. Under the proposed deal, Mirach Capital, headed by 34-year Indian origin Saransh Sharma had offered to extend a loan of USD 650 million to the Sahara Group, and invest around USD 400 million in Sahara’s properties in India. The Sahara Group is desperately looking to sell three of its overseas hotels–Plaza,Dream Hotel,Grosvenor House–to raise money to get its founder Subroto Roy out of jail.

09:35am FII View

Sakthi Siva, Credit Suisse says the performance of MSCI Asia ex-Japan has shown the best start since 2012 in 2015 so far. “In absolute terms, MSCI Asia ex-Japan has risen by 3.7 percent in 2015 so far and has outperformed MSCI World by 3.1 percent,” she adds.

She further says the brokerage believes this start could persist. “Additionally, India and China are the two economies with the highest real short rates and therefore possessing the greatest room for policy easing,” she adds.

09:15am Market Check

The market opened flat with negative bias on Friday. The Sensex fell 26.73 points to 28824.24 and the Nifty declined 2.40 points to 8709.30. About 434 shares have advanced, 225 shares declined, and 149 shares are unchanged.
M&M, HDFC Bank, Bharti Airtel, Hero Motocorp, BPCL, Bank of Baroda and DLF were down 0.4-1.8 percent while Cipla, ONGC, Hindalco, Sesa Sterlite, Reliance Industries and Cairn India gained 0.8-2.5 percent.

From the earnings corner, Tata Motors reported disappointing Q3 numbers. Jaguar Land Rover (JLR) margins came in below estimates. The company’s standalone business was hit by one off provisions as the management made a one time provision of Rs 310 crores for write offs at Singur plant. The stock lost 5 percent.

Earnings to watch out for today will be Tata Steel and NMDC. According to a CNBC-TV18 poll, Tata Steel’s total turnover will fall 4 percent to Rs 35400 crore while profits may plunge 58 percent. Meanwhile, NMDC may see a 4 percent drop in profits. 

The Indian rupee opened at 61.69 per dollar against previous day’s closing value of 61.73 a dollar.

Pramit Brahmbhatt of Veracity said, “Reduction in FII inflows coupled with weakness in local equities may pressurize rupee to depreciate. However, gains in Asian equities and some exporters selling may limit losses in the local unit. We see the USD-INR ranged between 61.20-62.20/dollar.”

Global cues, meanwhile, are positive with the US markets rallying 1 percent ahead of it’s non-farm payrolls report. The data is expected to show creation of 230,000 jobs in January.

Equities ended flat after the European Central Bank (ECB) put more pressure on Greece to come to an agreement with its lenders over the future of its bailout program. Greek markets closed down 3 percent.  Asian equities followed Wall Street higher but apprehension about Greece’s bailout program may cap gains.

In other asset classes, Nymex crude prices jumped about 4 percent as falling output and rising violence in Libya, along with central bank easing in China, helped crude rebound. Brent crude rose to USD 56 a barrel.

In the currency space, the euro inched up on strong German data, gaining back some of the lost ground. Data showed German industrial orders surged far more than forecast in December, hitting their highest level since April 2008.And precious metal gold dipped marginally to USD 1260 dollars an ounce.


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