Falling rupee, contracting manufacturing activity and rising inflation-only a maverick investor or a real contrarian could think of pumping more into equities at this juncture.
With the sharp drop in the rupee threatening to bring unpleasant consequences like costlier imports and bloated overseas debt, expect the central bank to intervene aggressively in the foreign exchange market and provide some support to the domestic currency.
Cues from the global markets are not encouraging either. Stock markets across the world continued to drift lower as the political impasse in Greece continues to fuel speculation that the country will eventually leave the Euro zone.
While Euro zone ministers dismissed the talk as “propaganda,” they have made it clear that the Greece has to respect the terms of the bailout program.
Overnight stock markets in the US closed at their lowest levels since February. S&P 500 lost 1.11% to 1,338 on selling in energy and financial services stocks.
Asian markets also opened on a weak note. Japan’s Nikkei fell 1.23% to 8,863 on selling in stocks of commodities and export dependent companies.
Fuelling concerns is the latest series of downgrades by the Moody’s Investors Service. The ratings agency downgraded the credit ratings of 26 Italian lenders. The development is expected to further worsen the continent’s “banking woes.” Read The Wall Street Journal report.
Back home, heavy duty truck producers are grappling with slump in sales. With demand falling in April, Tata Motors is paring production of heavy-duty trucks by as much as 40% in May and June from a year earlier, reports Mint.
With its order pipeline drying up in the domestic market, Larsen & Toubro is looking at overseas markets for growth. The company, which is targeting a growth of 15-20% in 2012-13, said it will focus on west Asian markets like Saudi Arabia, UAE, Qatar, Kuwait and Oman for business opportunities. Read the Mint report.
Keep an eye on Future Capital Holdings stock. Warburg Pincus is close to buying majority stake in the company, reports the Business Standard. According to the report, the private equity firm is likely to pay Rs 180 per share for acquiring the promoter stock. The stock closed at Rs 135 on the BSE yesterday.
Radico Khaitan has acquired two whisky brands from a Mysore-based company, reports The Economic Times. According to the report, the brands sell over half a million cases, mainly in Andhra Pradesh and Karnataka.
The Indian government wants the state-run NMDC and Geological Survey of India to explore Afghanistan for minerals. With a consortium of Indian companies winning rights to mine iron ore last year, the Indian government wants more domestic companies to participate in the bidding process. Read the Mint report.
Aditya Birla Nuvo, Bank of Baroda, Cummins India, Essel Propack, Gammon India, MMTC, Pantaloon Retail, Patel Engineering, Shree Cement, Unitech and Videocon Industries are some of the notable companies that will release their March quarter earnings today.
Finally, Apple is preparing a new line-up of thinner MacBook laptops that will run on Intel chips. The MacBook Pro machines are also expected to feature high definition screens like those on the iPhone and iPad. Read the Bloomberg report.