Markets to open higher; HDFC Bank, ONGC in focus

Markets are likely to open higher on Monday with HDFC Bank and ONGC in focus post their third quarter earnings

Markets are likely to open higher on Monday, amid firm global cues, with financial shares in focus after encouraging earnings from private banking major HDFC Bank. Further, with foreign investors turning buyers on Friday will also help boost sentiment.

At 8:25AM, the early indicator SGX Nifty was up 3 points at 8,854.

Foreign institutional investors bought equities worth Rs 390 crore on Friday, as per provisional stock exchange data.

Asian markets were trading marginally higher tracking a rally on Wall Street on Friday even as investors remained cautious over the European Union's debt deal with Greeece this week.

Further, data showed that Japanese economy grew 0.6% in the fourth quarter of 2014, which was lower than market expectations.

The Nikkei was up 0.7% at 18,030 while the Hang Seng was up 0.2% at 24,737 while Straits Times and Shanghai Composite were trading with marginal losses.

US stocks ended higher on Friday on the back of encouraging corporate earnings while stablity in global crude oil prices also improved investor sentiment. Meanwhile, investors will also watch out for fourth quarter earnings from global retail giant Wal-Mart this week.

The Dow Jones industrial average ended up 47 points at 18,019, while the broader S&P 500 gained nearly 9 points at 2,096.99 and Nasdaq ended up 36 points at 4,893.84.

European shares also ended higher on the back of encouraging data from Germany. The German economy rose 0.7% in the fourth quarter of 2014, which was higher-than-expected.

The FTSE 100 ended up 45 points at 6,873.52, DAX also hit a record high to end 44 points higher at 10,963.40 while CAC 40 ended up 33 points at 4,759.36.

HDFC Bank may gain on better-than-expected third quarter earnings. HDFC Bank, India’s second largest private sector bank, has reported a 20 per cent growth in net profit in October-December quarter to Rs 2,794.5 crore. The increase in profit came on the back of a higher other income and net interest income. The profit was higher than Street estimates. Bloomberg had pegged net profit at Rs 2,770 crore.

ONGC may witness selling pressure after net profit for the third quarter dropped 50 %. The net profit dropped to Rs 3,571.2 crore during the quarter, compared to Rs 7,125.9 crore in the corresponding quarter of the previous financial year (2013-14). The company said profit was impacted by Rs 5,386 crore as a result of the discounts offered to downstream firms to part offset their under-recoveries.

State-owned Oil India will be under pressure after it reported halving of its December quarter net profit as it was hit by low oil prices and fuel subsidy payout. Net profit stood at Rs 498.28 crore, or Rs 8.29 per share, in October-December 2014 compared to Rs 902.96 crore, or Rs 15.03 a share, in the same period a year ago.

Sun Pharma may remain subdued after the drug major reported a 6.92% decline in its consolidated net profit at Rs 1,425.07 crore for the third quarter ended December 31, 2014. The company had posted a net profit of Rs 1,531.09 crore for the corresponding period of the previous fiscal.

Suzlon may witness some pressure after the debt-laden wind turbine maker's Q3 net loss widened to Rs 6,538.68 crore on the back of sale of its overseas subsidiary Senvion. The company had reported a loss of Rs 1,075.25 crore in the corresponding period a year ago.

Indian Bank may firm up after its Board of Directors has given nod for the Government proposal to infuse Rs 280 crore in the bank by way of preferential equity allotment.

Unitech is likely to be under pressure after the realty firm's sales bookings dropped by 38 per cent to Rs 663 crore in the first nine months of the current financial year due to slowdown in housing demand. The Gurgaon-based firm had achieved sales bookings of Rs 1,071 crore in the April-December period of the last financial year.

GMR Infrastructure and Hindalco will be in focus. In the first day of the coal block e-auction, the Talabira-I coal block ultimately went to GMR Chhattisgarh at a negative bid of Rs 478 a tonne after nine hours of bidding. Incumbent holder Hindalco of the AV Birla group lost the block in the process and has the option to sell the infrastructure developed by it to GMR. Hindalco, which had its steel and captive power plant attached to this mine, will now have to bid for another block to get coal supply. However, Hindalco won the bid for Kathautia block.