Friday, 13 January 2012

Premarket buzz: Are fund managers selling IT stocks?

Wall Street stages a modest recovery to post decent gains led by strength in materials & industrials. Despite successful bond auctions, European markets closed lower on disappointing US economic data.

On US economic data front, Weekly claims for unemployment benefits gained more than expected, climbing by 24,000 to a seasonally adjusted 399,000, the highest in six weeks. Retail sales rose a disappointing 0.1 percent in December, the weakest pace in seven months. Business inventories gained 0.3 percent in November.

Asian markets rise in opening trade as concerns over euro zone's funding problems ease. The SGX Nifty points to a modest start for the Indian markets

In the currency space, the euro hits a one-week high versus the dollar after European Central Bank President Mario Draghi said policy makers have averted a credit shortage and Spain sold almost twice its maximum target at a note auction. The euro was steady at 1.28 to the dollar.

In other asset classes oil drops after uncertainty over EU negotiations on Iran sanctions. Nymex Crude slips below 100 dollar mark. Gold inches higher to above USD 1645 levels.

Shares of Infosys and TCS marked their highest delivery based selling after poor guidance by the former IT bellwether. Stocks worth more than Rs 800 cr were sold by Infosys shareholders. This was the highest delivery recorded in last 3 quarters on the day of Infosys earnings. Around 51 lakh delivery based selling happened in TCS shares yesterday. Rupee has also appreciated close to 5% in this week perhaps indicating fund managers are getting out of IT stocks.

LIC has set aside a corpus of nearly Rs 10,000 crore to buy a part of the shares owned by SUUTI. The government has informally sounded out LIC about the impending dilution of SUUTI that owns more than 11% in ITC, around 8% in L&T and over 23% in Axis Bank.

News reports suggest steel makers have hiked prices once again, the third hike since the start of January and this time the price increase is 500 rupees per tonne.

A leading newspaper reported Apollo Tyres has paid 5.7 million dollars as fine to the Competition Commission of South Africa after found guilty in a tyre cartel.

Leela has put its upcoming Chennai resort on the block. Sources say Leela is looking to raise almost Rs 930 crore from the sale of this beach resort. Buyer can be NRI Ravi Pillai, who had bought Leela's Kovalam Property last year for Rs 500 crore.

Sources also indicate that Unitech and Telenor continue to disagree on rights issue.

Results Today: CMC, Goa Carbon, Sintex, Triveni

Riken Mehta

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