Mumbai: A fresh start to the week as Italy gets a new lease of life, with the end to the Prime Minister, Silvio Berlusconi’s 17-year old controversial and brash regime, paving the way for Mario Monti, a former official of the European Commission to take charge. The Italian parliament finally approved a package of economic measures to help the country contain its escalating debt. His resignation has come right after the fall of Greece Prime Minister, George Papandreou on Thursday.
On Saturday, crowds in Italy were cheering as if they have just won the soccer world cup, but on the other side investors raised a red flag over France’s rising debt. French bond yields surged to four month high, at 3.5% owing to the fiscal strain and after the rating agency Standard & Poor’s mistakenly cut the country’s credit rating. While the credibility of the rating agencies has come into question, analysts said that investors were demanding high premium to hold French bonds compared to the German bunds since the Euro was introduced.
In the Unites States on Friday, the markets ended higher for the week on news of progress in approval of the economic reforms by the Italian senate which would pave the way for the new government. Also, US consumer confidence data surpassed expectation, boosting investor sentiment. The Dow Jones Industrial Average and the S&P 500 advanced around 1% each for the week.
Asian markets opened on an upbeat note on Monday morning tracking firm closing on Wall Street. Financials were leading the gains in Japan. The Nikkei Stock Average added 1.5% after the economy rebounded in the July to September quarter. clocking 6% GDP growth. Hang Index climbed 2.4% and China’s Shanghai Composite advanced 0.8%.
Back in India, the World Economic Forum’s summit grabbed the headlines over the weekend. Indian officials warned against protectionism as the world was on the brink of sovereign debt crisis. Also Chanda Kochar, CEO of ICICI Bank said ”capital inflows to India might be affected because of the worrying global economic scenario.”
Nifty futures on the Singapore Exchange were hovering around 5,258 levels, up 59 points at 7:30 hours, indicating that markets may open higher.
The following stocks are in the news today:
On the sidelines of the World Economic Forum, Bajaj FinServe said that the company has received approval from Sebi to set up mutual fund business by the end of 2010. The financial services arm of Bajaj Group is in the process of evaluating the right business model to set up the mutual fund.
GMR Infrastructure may be on the radar in opening trades after the company said that it is looking at overseas bidding for airport development opportunities because the air travel industry is booming, despite the slowdown. The Indian Infrastructure firm controls two airports in India, at Delhi and Hyderabad and also two airports overseas - in Turkey and Male.
JSW Steel will be closely watched after Japan’s JFE Holdings announced it may increase stake in JSW Steel, taking advantage of the recent change in takeover norms and sharp fall in the stock price. As of 30 September JFE has 14.78% stake in JSW Steel. On Friday, the JSW Steel stock closed at Rs 673.
Kingfisher airlines will continue to be on the radar today as the board will come up with a plan to reduce the debt. The airline which was in the news last week for cancelling flights is looking at cutting debt by nearly 50%, from 6,500 crore to Rs 3000 crore. The company may sell property, change the terms to lease aircraft or convert loans into equity from the parent company to pay off debt.
Among the companies that reported second quarter results, Reliance Communication shares may drop in morning trades after the second quarter net dipped 44%, at Rs 252 crore and the operating revenues the declined 4.6%, at 4,792 crore mainly because of tariff war on account of high competition from new operators.
Lastly, the hoopla over third generation spectrum may be over before even taking off as the 3G experience is falling short of expectations. Mobiles users are veering away from 3G services due to speed and connectivity issues, finding no difference between 2.5G and 3G. a survey by Nielsen found that only 19% customers plan to use 3G this year, which was similar to last year.