Nifty holds 4900, rupee rebounds but has India lost its 'growth story'?

Global selloff and a shocking GDP of 5.3 percent for the fourth quarter of FY12 has sent the Indian markets in red. The Sensex opens 50 points lower at 16171, while the NSE Nifty is more or less flat, down 8 points at 4916. The mood is likely to remain somber and the impact of weak GDP numbers will be visible amid listless global cues. However, there was one comforting number that may give some solace to the frenzied investors’ as country’s fiscal deficit narrowed to 5.75 per cent of the gross domestic product (GDP) in 2011-12, compared with 5.9 percent in the revised estimates.

The rupee opens at 56.25, but recovers to 55.95 in early trade.

Tech stocks are weak in opening trade; Wipro is down 1.3 percent, Infosys falls 0.9 percent and the entire BSE IT index is down 0.65 percent. Banks, however, are trading in green; ICICI Bank is up 0.7 percent, SBI gains 0.65 percent. Cairn India is down 3 percent. It is the top Nifty loser this morning.

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Winners and losers: Auto, Bankex and Realty indices are the gainers. Oil and Gas, Consumer Goods, FMCG, Teck, IT , Metal, PSU indices are the losers. Maruti Suzuki, Tata Motors, ICICI Bank, Jaiprakash Associates and Axis Bank were top gainers on the Nifty. Cairn India, Wipro, Sesa Goa, Asian Paints and SAIL were top losers

Sudarshan Sukhani of s2analytics.com had a bullish stance on the Nifty but he has now shifted it to neutral. He finds that the market has not followed through with any kind of rally after the breakout.“Today the trade is if we see an intraday rally in the Nifty the idea would be to go and sell it because the chances are that higher levels are not going to be sustained. Any sharp dip, not 4,890 where there SGX suggests, but anything 30-40 points below this would be an intraday buying opportunity,” he told CNBC-TV18.

That GDP growth in Q4 was the slowest in nine years shows how big a setback we have suffered.While growth has decelerated, inflation remains sticky and deficits are soaring. The rupee’s slide underscores the deterioration in economic fundamentals. Motilal Oswal, however, feels the market had already factored in the slowing economy and the GDP numbers were not so much of a shock. He added that hopes of RBI easing the monetary policy is also supporting the stock market.

Meanwhile, Ruchir Sharma of Morgan Stanley told Bloomberg that India has ’lost the plot’ on the growth story and that a commodity price drop is the only hope. He added that India is going back to the per-emerging market boom of 2003 and will not outperform peers.

Also, the government has announced a series of austerity measures in a bid to cut its non-plan expenditure by 10 percent during the current fiscal.

The telecom stocks are likely to be buzzing as the cabinet approved the New Telecom Policy 2012, which will let users to retain the same number when they change service providers across the country, it also aims to do away with roaming charges.

Key Results Today: McNally Bharat and Mphasis.

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Meanwhile, RBI in its draft report has favoured relaxing the investment limit for foreign institutional investors (FIIs) in sovereign bonds, and also doing away with witholding tax. The report also favours reviewing of trading norms for foreign investors in the derivatives segment.

Stocks in News

The Delhi High Court’s verdict on the IGL versus PNGRB case is today. The court is likely to decide in the dispute between government regulator Petroleum and Natural Gas Regulatory Board (PNGRB) and gas utility firm Indraprastha Gas. IGL had approached the Delhi high court over the constitutionality and legality of the powers of PNGRB to fix network tariffs.

DLF is attempting to close three large land sales in the first half of FY13. Its debt commitment is at Rs 3,900 crore for this fiscal. The realty firm is looking at maintaining its EBITDA margins at 45%-50%.

Sources on coal block allocation say the CBI will investigate misuse of allotted coal block by private companies where four-five companies violated norms of captive usage of coal. The BJP’s complaint refers to misuse and alleged sale of surplus coal.

Pantaloon shareholders okay the convertible debenture issue to AB Nuvo. The former will issue Rs 800 crore debentures to AB Nuvo.

BHEL said it has bagged orders worth Rs11.43bn from NTPC, to set up a 500-megawatt power generating unit at its Vindhyachal Super Thermal Power Station in Madhya Pradesh

**SpiceJet’**s stock nosedived by 10% yesterday after the company reported over a four-fold rise in net loss at Rs 249 crore for the fourth quarter ended March 31.

Reliance Power and energy major Shell will build a terminal off the Andhra Pradesh coast to import 5 million tonne a year of liquefied natural gas (LNG) from 2014.

Norway’s Telenor is confident of roping in a new partner in India before a radio airwaves auction due by end-August, said Sigve Brekke, head of the company’s Asian operations.

Brokerage firm Macquarie has upgraded HUL to outperform with a target price of Rs 600. It said HUL’s underachievement was a thing of the past and the 21% valuation gap with Nestle will narrow down.

Bharti Airtel has given a three-year contract to Alcatel Lucent India for setting up an internet protocol access network across the country, for an undisclosed amount.

Even as sales taper across sectors forcing some automobile companies to put expansion plans on hold, Mahindra & Mahindra is going ahead with a major expansion plan that includes acquisitions by outlaying Rs75bn of funds for the next three years.