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Contents
Tightening noose around teaser rate home loans
The RBI yesterday announced a slew of measures to curb the teaser rate home loans. The impact will be maximum on SBI (~4% of FY11E profits). Bank of Baroda which has not resorted to the teaser rate loans will not be impacted by the tightening. If the norms are ratified by National Housing Bank then HDFC (~6% of FY11E PAT) and LIC Housing Finance (~10-15% of FY11E PAT)
No impact going forward
As all the banks and HFCs have stopped teaser rate loans for the end of last month, there will not be any recurring impact on the profitability.
n Dealer Comments
The markets started the day’s session on a marginal positive note with almost 40 odd point’s upward gap tracking subdued cues from the global markets particularly the mixed Asian counterparts. Post positive opening markets thereafter traded in a very narrow range throughout the trading session in the absence of flows and absence of any major triggers on both global and domestic fronts from all categories of investors. Trading on the Indian bourses keeps getting more and more lacklustre and range bound and void of volumes as investors choose to hold their bets ahead of the Christmas weekend. The indices got support from buying in healthcare, banking and technology stocks while selling pressure in capital goods, fmcg, auto, realty, cement and metal stocks capped the gains for the day. Good buying was seen in sugar stocks in late trading today and most of the stocks were up in the range of 3-5% across the space. Sail took a good beating in today’s trade as market was agog with talks that the its FPO issue will priced at around Rs 165 levels, much lower then the current market price. Finally the markets closed the day on a negative note towards the end with Sensex losing 33 points or 0.16% lower to settle at 19982 levels while Nifty lost just 4 points or 0.07% lower to settle at 5980 levels. The overall traded volumes were quite lower compared to the earlier day by almost 20% and were at Rs 1014 bn. While delivery based volumes were almost flattish compared to the earlier day at 38% of the total traded turnover. Among the Fund activities FII’s were net sellers to the tune of Rs 0.45 bn 22nd December 2010. While on 23rd December 2010 FII’s were net sellers to the tune of Rs 1.43 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 1.09 bn while Domestic Funds were also net sellers to the tune of Rs 0.83 bn.
n Technical Comments
Triangular consolidation
Today Nifty saw a quiet session and traded within a very narrow range through-out the day. Combining today’s price action with that of previous day, the net result is a symmetrical triangle of hourly chart. Since this triangle is being formed at the resistance of 50-DSMA, the probability of it breaking on the downside is pretty high. Secondly, the hourly momentum oscillator is also indicating that the downside momentum is gaining strength. So we still maintain our bearish stance for the target of 5800.
BSE Metal:
BSE Metal index has formed a Bearish Engulfing candlestick pattern on daily chart and hence a pull back upto 16770, which is the 50% retracement mark of the current up-move, is an utmost possibility.
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