No Fed boost for Sensex, rupee nears all-time low, Bhel soars

The Indian markets opened lower today as Asian markets are mostly in the red.The Federal Reserve may not have delivered a QE3 but the so-called “Operation Twist” plan - aimed at keeping rates low - has been extended to the end of the year. It was due to end this month. On the flip side, the Fed has scaled down its projections of GDP growth and inflation while warning that unemployment will stay largely elevated. US markets closed virtually flat at the end of a choppy session. Also, the preliminary HSBC China manufacturing PMI for June has dropped vs. final May reading.

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While the Sensex opened around 41 points lower at 16851 levels the Nifty is down 14 points and is holding above the crucial 5100 level. Meanwhile, the rupee is trading near its all-time low, currently at 56.33 versus the dollar as risk assets fell on disappointment about the scope of U.S. Federal Reserve’s bond purchases and after HSBC factory data from China showed a contraction.

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Kingfisher is the top traded on NSE in early trade; the stock is up 1.8 percent while poil stocks are also tradinghigher today. HPCL is up 2.6 percent, IOC gains 2 percent, BPCL is up almost 1 percent.

BHEL is the top Sensex gainer; the stock is up 1 percent to Rs 217 on reports that the government is likely to impose a 21% duty on imported power equipment.The protective duty, may give the domestic equipment suppliers a double benefit if the rupee continues to remain depreciated at the current levels. Foreign equipment makers account for almost 30% of the total power equipment market in India and Chinese equipment makers have bagged large projects like that of Reliance Power, while the Tatas, builders of another power mega power plant have opted for Korean power equipment maker over domestic companies

BPCL,Bharti Airtel and Siemens are holding in the positive terrain. Cairn India is a loser on account of a sharp fall in crude oil. PSU banks and cement companies are also under pressure.

Telecom stocks are likely to be buzzing today, as there is a meeting of the empowered group of ministers on spectrum price scheduled today and it is learnt that Prime Minister Manmohan Singh has asked Finance Minister Pranab Mukherjee to ensure that crucial decisions be taken before he steps down.

Cable related stocks are likely to come under somber mood as much awaited digitalization of cable TV services in four metros will now have to wait for four months beyond July 1. The ministry of information and broadcasting has decided to modify the 30th June deadline for a complete switch over to 31st October 2012. Hathway Cable is down 2.5 percent, while Den Network is down 2.25 percent in early trade.

Power equipment sector stocks are likely to remain under pressure on buzz that the power ministry, in the next couple of weeks, will move a note to the Union Cabinet proposing a levy of 21 percent on imported power equipment.

The Competition Commission of India may announce its order on alleged cartelisation by cement companies today. The CCI is redrafting certain portions of the final order which seeks to impose a penalty on 11 cement companies for inflating cement prices by forming a cartel. The cement companies, reportedly decreased production to inflate prices, which works against the interest of consumers. UltraTech Cement is down 2.55 percent, ACC cements is down 1.1 percent

Traders will also be eyeing the movement of rupee after it fell beyond 56 level in last session on RBI governor D Subbarao’s statement that growth would have to be sacrificed to bring inflation under check.

Stocks in news

Max India, has shelved plans to build a five-star hotel in Noida’s premium Delhi One project over concerns that upcoming hotels in the city would lead to a glut of upmarket rooms, said an Economic Times report.

The ministry of defence (MoD) has chosen a private sector consortium to compete with Bharat Electronics Ltd (BEL), to develop a backbone communications network for the 21st century battlefield. The project is worth an estimated Rs 10000 crore, said a Business Standard report.

On the heels of sewing the nation’s first gas import deal from the US, GAIL India wants Washington to relax rules so that it can buy more liquefied natural gas (LNG) to meet growing energy needs here.

Jyothy Laboratories will relaunch Henkel’s brands as the merger between the two companies gets going.

Titan Industries is understood to be working extensively on a product roadmap that would pitch it directly against established Indian leather retailers in the organised segment.