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Global cues, Q3 earnings and FOMC meet to steer market today

Fresh tensions between the US and China, Fed monetary policy meeting and movement of crude oil prices are some of the major factors that are likely to guide domestic stocks on Tuesday.

BS Web Team  |  New Delhi 

Fresh tensions between the US and China, Fed monetary policy meeting and movement of prices are some of the major factors that are likely to guide domestic stocks on Tuesday. This apart, December quarter results of companies such as Axis Bank, Bajaj Finance, Bank of Baroda and HCL Tech will also play a key role in

On Monday, the equities fell for a second day in a row, owing to heavy selling in financials, auto and pharma counters. The S&P BSE Sensex lost 369 points or 1.02 per cent to end at 35,657 while NSE's Nifty50 index slipped below 10,700 level to settle at 10,662.

Among top news, Finance Minister Piyush Goyal said public sector banks (PSBs) will become more profitable and proactive in the days to come, after holding a review meeting with the lenders on Monday.

In another news, Jet Airways is seeking shareholders' nod to convert its debt into equity, appoint bank nominees on the board and increase the authorised share capital of the company to enable the issue of fresh preference shares. An extraordinary general meeting (EGM) of shareholders has been called on February 21 to seek approval for these proposals.

In addition, Chalet Hotels is slated to open its initial public offering today.

The Indian on Monday managed to end 7 paise higher at 71.10 against the US dollar on increased selling of the greenback by exporters amid easing prices and uptrend in other emerging market currencies.

GLOBAL MARKETS

Wall Street ended lower on Monday on weak earnings forecasts from Caterpillar Inc and Nvidia Corp.

Asian shares faltered in the early trade on Tuesday and the dollar hovered near two-week lows as prospects for a Sino-US trade deal was dealt a blow after the United States charged Chinese telecom firm Huawei with bank fraud and for conspiring to steal trade secrets.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5 per cent with Australia’s benchmark index down 0.7 per cent and South Korea’s KOSPI off 0.6 per cent.

OIL PRICES

Oil prices steadied, edging up from a near two-week low in the previous session when prices fell around 3 percent on fears of supply growth and a global economic slowdown.

Input cost pressure hits UltraTech Cement's operating performance

Last week, India's top cement companies by market value Shree Cement and UltraTech reported strong volume growth, led by revenues for the December 2018 quarter (Q3). As robust demand remains supportive, Shree Cement's total volume (cement plus clinker) growth of 11 per cent year-on-year (YoY) (5 per cent sequentially) was driven by strong sales in eastern India. UltraTech, too, saw volumes surge by 14 per cent YoY (15 per cent sequentially) led by buoyant demand, and high capacity utilisation of the cement plants acquired from JP group.

While both companies reported strong volumes, softer than expected realisation and input cost pressure affected UltraTech's operating performance.

Volatile Zee shares cast a shadow on MFs' loan-against-shares play.

The meltdown in Essel group shares on Friday raised concerns over the loan-against-shares (LAS) model where mutual funds (MFs) are estimated to have an exposure of Rs 23,000 crore.

According to industry sources, fund houses, in some cases, have taken exposure to entities with less than two times the share cover.

This is lower than what the Reserve Bank of India (RBI) stipulates for non-banking financial companies (NBFCs) that lend against shares.

The RBI stipulates that all NBFCs with more than Rs 100 crore asset size need to maintain a loan-to-value (LTV) of 50 per cent where listed shares are placed as collateral.

First Published: Tue, January 29 2019. 08:04 IST
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