 "Nifty ends flat, L&T biggest loser on surprise drop in Q1 net")
Indian markets closed flat today and are expected toremain range-bound this week and may see cautioustrading ahead of RBI’s monetary policy, even as investorsclosely watch first quarter corporate earnings and look atglobal cues.Besides, there may be volatility in view of settlement inthe derivatives contracts this week.
While the BSE Sensex ended up 0.02 percent at 20154, the Nifty ended flat at 6038.
BSE capital goods index ended at the bottom of the sectoral pack with losses of 5.7 percent thanks to losses in L&T after itposted a surprise drop in its fiscal first-quarter net profit as a weak domestic economy hit spending on infra projects;. The company, however, maintains its growth forecast for the current fiscal year
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The rupee weakened further in trade to 59.55 against the USD after opening at 59.29 against the USD. In fact the RBIcould also consider raising the policy repo rate if the rupee falls towards 61-62 to the dollar.
The government is also looking to attract dollar inflows through non-resident Indian deposits to support the rupee and has dropped the option of issuing sovereign bond for now, two government officials with direct knowledge of the deliberations told Reuters.
RBI even wants to curb unregulated non-banking financial services as part of the its efforts to head off situations in which depositors could lose their money.
Meanwhile, the weak rupee, along with slow growth, deterioration in the current account, and the likelihood of fiscal worries could revive sovereign ratings downgrade risks for the country, DBS said in a note.
India’s forex reserves continue to contract. The total foreign exchange reserves as a percentage of total external debt, now stands at 74.8 percent versus 85.2 last year.
The bank said that rebuilding of the foreign exchange reserves will remain a challenging task in the current environment with exports remaining on the backfoot.
Stocks in news
Larsen & Toubro (L&T) declined 7.3 percent.The company disappointed the street on every parameter with the first quarter (April-June) net profit falling higher-than-expected 12.5% year-on-year to Rs 756 crore.
Wockhardt sank around 9% on the BSE as the pharma major said it has received a warning letter from US health regulator over its facility at Waluj in Maharashtra not meeting manufacturing norms. The company had earlier in May announced that the US Food and Drug Administration had issued an import alert on its Waluj facility, which makes injectables and solid dosages.
Asian Paints closed down at Rs 5,130, after the company’s results lagged estimates. The company reported a net profit of Rs275 crore against expectations of Rs 309 crore.
ADAG stocks are down. RCom closed down almost 3 percent as the CBI has sought to question Anil Ambani and wife on seven issues related to 2G case