All Eyes on an upcoming Resistance - Infosys :: HDFC securities

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The Nifty rose a solid 133 points  on Thursday and closed at 8235. The resistance to the market  going forward could come from the gap it created on its way down. This gap is in the region of 8328-8378.

Meanwhile, Infosys will present its quarterly report today, where a cut in the next quarter?s guidance is baked in. But the markets are not too much bearish on the stock as they appreciate the fact that the current quarter margins could be flat because of the cross-currency hits. The business per se is strong. 

However, the markets may want to hear from Dr Sikka of a longer term plan for the company.The street does not expect much from Infosys as the December quarter ( Q3) is concerned.  
Infosys is expected to report a 1.9% growth in profits at Rs 3,157 Cr (excluding forex loss/profit) for the quarter ended December 2014. Revenue may jump by 3.3% sequentially to Rs 13,783 Cr while dollar revenue may increase by 1% QoQ to USD 2,222 million during the quarter. 

Earnings before interest and tax (EBIT) would grow 2.7% QoQ to Rs 3,576 Cr but margin may be flat at 25.95% in the quarter ended December 2014 compared to 26.1 % in previous quarter. 

The street expects  that guidance could be cut to 6-8 % or 6.5-7.5 % in Q3FY15 from 7-9 % due to cross currency impact. However, constant currency growth guidance may be maintained at 7-9 %. Moreover the company is likely to lay out its near-to-mid term strategy and targets.

NBCC gets Rs 1237 cr work order in Odisha under the Pradhan Mantri Gram Sadak Yojana

Government owned  National Buildings Construction Corporation Ltd (NBCC) yesterday bagged a Rs 1,237-crore order in Odisha under the Pradhan Mantri Gram Sadak Yojana.
NBCC is present in three main segments -- Project Management Consultancy (PMC), Real Estate Development, and EPC Contracting.
The central PSU, which had a turnover of less than Rs 4000 cr last year has, orders on hand around 20.000 cr.  This order book is slated to dwell further in the next few quarters if the management statement on electronic media, recently, is to be believed. With the swelling order book, one could expect the Government contractor to sub-contract the incremental work. If this model works successfully, the company is likely to be further re-rated.

Moodys upgrades Tata Steel to Ba1; confirms Tata Steel UK at B2

Moody has upgraded Tata Steel Limited corporate family rating to Ba1 with a stable outlook. Moody has also confirmed Tata Steel UK Holdings Limited ("TSUKH") corporate family rating and probability of default rating at B2/B2-PD with a positive outlook. 

The upgrade of Tata Steels rating reflects the group-wide refinancing and the improved liquidity which will support further growth of its highly profitable Indian operations. At the same time, the pressure to support TSUKH working capital has abated in the wake of the refinancing of its senior facility agreement while better and sustained margins have led to reduced losses at TSUKH.

Govt aborts UMPP bidding over tepid private sector response

The ambitious ultra mega power project scheme has received a set back with centre canceling the bids for the two proposed plants at Odisha and Tamil Nadu due to tepid private sector response and funding issues raised by bankers.

Power Ministry is reviewing the situation and may soon appoint an expert panel that will examine the documents to determine if the methodology adopted at the time of tendering these projects was fair. 

SEBI proposes to cut timelines for listing shares, faster fund raising in new e-IPO norms

To boost fund raising from markets, the Securities and Exchange Board of India, on Thursday, proposed e-IPO norms, where investors can bid for shares through Internet and eventually on mobiles, while already listed public sector undertakings (PSUs) will be provided a `fast-track? route for share sales to meet the disinvestment targets.

For already listed companies as well, the market regulator has proposed a fast-track route for raising of funds through FPOs (follow-on public offers) or rights offers (where funds can be raised from existing shareholders).Under the new norms, SEBI has proposed to drastically cut the timeline for listing of shares within 2-3 days of the IPO, as against 12 days currently.

SEBI has invited public comments till January 30, after which it would put in place final norms for e-IPO as also for fast-track issuances.

Cadila recalls 19,536 bottles of cough treatment drug in US

Drug firm Cadila Healthcare is voluntarily recalling 19,536 bottles of benzonatate capsules, used to treat coughs, in the US due to "wet and/or leaking capsules".

According to a notification by the US Food and Drug Administration (USFDA), the recall of the 19,536 bottles has been voluntarily initiated by the company through its US based arm Zydus Pharmaceuticals USA Inc.

The recall has been initiated by the company on December 23 and has been initiated under Class-II, which FDA states as a situation in which use of or exposure to a volatile product may cause temporary or medically reversible adverse health consequences.The capsules were manufactured by Cadila Healthcare and distributed in the US by Zydus Pharmaceuticals USA Inc.

Essel Group pledge to invest Rs.20,000 crore in Bengal

Essel Group  on Thursday pledged to invest Rs.20,000 crore towards developing two smart cities and and various vital infrastructural projects in West Bengal.

The group has submitted a letter of intent (LOI) to the state government to develop the two satellite townships Salt Lake and New Town into smart cities by investing Rs.10,000 crore.

"The group was also interested in participating in infrastructural, urban renewal and socially relevant projects worth Rs.10,000 crore through competitive bidding under Build, Own, Operate and Transfer (BOOT) model and/or EPC (Engineering, Procurement and Construction) model," the LOI said.

Essel is targeting projects like toll roads with an investment of Rs.3,000 crore, sanitation and water treatment worth infusion of Rs.2,000 crore, and a project to convert municipal solid waste to energy by pumping in Rs.2,000 crore. Besides, it is eyeing projects like, metro, monorails or Light Rail Transit mass transport involving investment of Rs.3,000 crore.

Wall Street surges on stabilizing Oil & Dovish comments by Fed
official

Key U.S. Indices were in a rally mode Thursday  amidst signals that Crude was stabilizing and that a Fed official was of the view that rate hikes may wait till 2016.

The Dow Jones Industrial Average rallied 323 points or 1.84% to 17,908. All 30 of the Dow components rose to make the blue-chip index close in green for the year.

The S&P 500 rose  36 points or 1.78% to close at 2,062.  9 out of the 10 sectors rose to steer the broad based benchmark into the green for the year. 

The  Nasdaq Composite   too rose 1.84% or 86 points to close at 4,736. With Thursdays rally the tech heavy index is now into neutral territory for the year.

Meanwhile, a measure of implied volatility , CBOE Vix index, fell below its long-term average to 17.

Prior to Wednesday, stocks had suffered a five-day losing streak, catering alongside crashing oil prices. Over those five days, the S&P 500 fell more than 4% and the Dow dropped 3.8%. Over the past two days, however, stock markets have rallied around 3% and erased the losses suffered over the first few trading days of 2015.

Crude oil appeared to be stabilizing  at over $48 a barrel after plunging to fresh 5 ?-year lows earlier in the week. The commodity had been in freefall as global oil producers gave no signs they would limit production in the face of faltering demand. 

U.S. oil prices for February delivery zigzagged, tapping nearly $50 a barrel at times but settled at $48.79 a barrel. Futures for Brent crude settled at $50.96 a barrel. 

Bond markets also calmed down with 10-year Treasury yields recovering above the 2% level.
Charles Evans, President of the Chicago Federal Reserve Bank, and voting member of the FOMC, reiterated the central bank's commitment to a conservative approach to rate hikes. "I don't think we should be in a hurry to raise rates," Evans said at a stand-alone conference on Wednesday. He does not advice rate hike until 2016.

Investors are also looking towards Friday's employment report. Expectations are for 240,000 jobs to have been added to non farm payrolls in December, lower than November's blockbuster 321,000 though remaining above 200,000 for the 11th consecutive month.
Nine out of ten  S&P 500 sectors were higher, though retailers were among the best individual performers.

Aeropostale soared 24.8% as the teen retailer reported higher margins over the holidays and guided for a narrower loss in the fourth quarter. Barnes & Noble was up 5% as core comparable-bookstore sales jumped 1.7% over the holiday shopping season. The bookseller expects flat core comparable-store sales for the full year.

Urban Outfitters reported a 4% jump in comparable-store sales over the holiday shopping season with total sales growth of 10% to $785 million. 

J.C. Penny announced plans to shut 40 of its stores by April, eliminating 2,250 jobs. A spokesperson of the retailer said the company would try to reassign positions at nearby stores. Shares were up 0.76% after rallying more than 20% on Wednesday.

Global Payments surged 6.9% as second-quarter earnings beat forecasts and revenue jumped 10%.

Consumers increased their use of credit in November by the slowest pace in a year, Federal Reserve data released Thursday show. 
Consumer credit grew at a seasonally adjusted annual rate of 5.2% in November, for a gain of $14.1 billion to $3.30 trillion, the Fed said. 

Revolving debt like credit cards fell at a 1.3% pace, which was also the biggest drop since last November. Non  revolving debt like car and student loans grew at a 7.5% pace. Over the last three months, consumer credit has grown by an average rate of 5.7%, down from an 8.3% pace seen over the three-month span from March through May.