 "US ending debt impasse a non event: Sensex flat, HCL Tech down")
Indian markets opened in the green but soon turned flat even as global markets are up after the US House approved a legislation already passed by the Senate to reopen the government and raise the federal debt limit.The agreement came just one day before the treasury was expected to exhaust its ability to borrow more money
President Barack Obama had said if it is passed he would “sign it immediately. We’ll begin reopening our government immediately.”
But even though theUS has managed to end the govt shut down and raise the debt ceiling, it is just a temporary fix. It funds the government until Jan. 15 and raises the debt ceiling until Feb. 7
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While the BSE Sensex opened 55 points higher at 20574, the Nifty was up 4 points at 6094. IT stocks were surprisingly down in trade on profit booking despite posting stellar results.
H Nemkumar, IIFL believes the best performing stocks are from tech and pharma sector because these are the sectors where earnings momentum is reasonably strong and earnings upgrades too have taken place.
US indices ended over 1% higher. The Dow Jones was up 205.82 points, or 1.36%, at 15,373.83, while Standard & Poor’s 500 Index was up 23.48 points, or 1.38 percent, at 1,721.54. Fitch Ratings, however, warned that it could cut the sovereign credit rating of the United States from AAA citing the political brinkmanship over raising the federal debt ceiling, according to reports.European stocks closed higher overnight, paring earlier losses, as investors bet on an imminent deal in the US to end the shutdown. In Asia, the Yen hit a new three-week low against the dollar for a second consecutive session, trading at 99 per dollar; seventh straight session of gains. Korea-central bank data showed producer prices eased for a twelfth straight month in September.
On the flipside, downgrades continue with now the World Bank revising downwards India’s economic growth forecast for the current fiscal to 4.7 %. This is against an earlier estimate of 5.7% for 2013-14.
Meanwhile, Corporate India is shocked at the recent developments regarding Kumar Birla. Former union coal secretary Prakash Chandra Parakh reportedly said that if the CBI thinks there is a conspiracy in the allocation of Talabira blocks, then along with KM Birla and him, Prime Minister Manmohan Singh should also be named in the chargesheet.
Stocks in news
HCL Technologies is down 1 percent after it reported a consolidated PAT at Rs 1,416 crore, beating analyst expectations. However, analysts were disappointed on the revenue front which came in below estimates.
Tata Consultancy Services, India’s number one IT services exporter on Tuesday reported a Profit After tax (PAT) of Rs 4702 crore versus Rs 3796.2 crore in Q1. This is a rise of 24.7% quarter-on-quarter. The stock is down 1.29 percent in trade today due to profit booking.
The dollar revenues for Q2 were reported at $3.33 billion versus $3.16 billion QoQ. Q2 sales stood at Rs 20,980 crore versus Rs 17,987 crore QoQ. The foreign exchange loss for Q2 was reported at Rs 377 crore.
Bajaj Auto is up 1.6 percent after it posted a net profit of Rs 837 crore for the quarter, up 13 per cent, compared with Rs 740 crore in the corresponding quarter last year. Revenue rose to Rs 5,334 crore, as against Rs 5,100 crore in the year-ago period.