Opening Bell 6 May

Opening Bell 6 May

New Delhi: It’s Friday and red seems to be the code of the day. Overnight, commodities, led by silver and energy futures, plunged the most in two years as traders liquidated their positions on concerns that the US economy is weakening. Here’s a list of things to watch out for before trading starts.

The Standard & Poor’s GSCI index of 24 commodities fell 6.5% in New York. US crude oil tumbled 8.6%, the most in two years, to $99.80 a barrel. Silver dropped 8%. Read more...-

The sharp sell-off in commodities has sent US stock markets lower. The S&P 500 lost 0.91% to close at 1,335 as commodity shares tumbled.

Crude oil prices went into a free-fall. Brent crude futures for June delivery fell more than 8% to settle at 110.80 a barrel. Weak economic data from the Europe and the US raised concerns about the sustainability of economic growth. According to Reuters, German industrial orders fell unexpectedly in March while US weekly jobless claims hit an eight-month high.

Negative overnight cues led to weak opening in Asian stock markets. Japanese stocks tumbled by 1.8% on concerns about slowing the global economy.

The steep fall in crude prices might be a good cue for Indian stock markets. But the reasons behind the overall sell off in commodities and commodity stocks might be difficult to digest.

Meanwhile, the Finance Minister is looking scaling down 2011-12 GDP growth projection to 8% due to high oil prices. The consistently high inflation in the domestic economy is making policy makers revise their projections for the current financial year.

Bank credit growth is showing the first signs of slowdown. Total bank credit for the fortnight ended 22 April has fallen by 0.95%. For the fortnight ended 8 April, total bank credit had posted a marginal growth of 0.45% as against a fortnight before.

Expect some action to continue in the shares of Ranbaxy Laboratories. The firm$ is in discussions with the US drug regulator to lift the ban on import of medicines produced from two of its plants. As part of the settlement, there is speculation that the company might be asked to pay a fine of 4,476 crore.

Essar Steel won an order from Mazgaon Docks to supply 13,000 tonnes of steel plates to Indian Navy warships. The company did not disclose details about the value of the order.

Jyothy Laboratories will pay 118.7 crore to buy majority stake in Henkel India. The company will acquire 50.97% stake from Henkel’s German parent. The acquisition will trigger the mandatory open offer of 20% to the public shareholders of Henkel India.

IL&FS Transportation Networks is expecting fresh orders worth 4,000 crore in the current financial year. The company hopes to win at least 200-300 km of road projects this year.

PVR had entered into an agreement with JM Financial Group to sell its multiplex property in Mumbai for 100 crore. PVR intends to lease back the property from JM Financial Group to operate multiplexes.

Cipla reported a 22% drop in fourth quarter net profit to 214 crore. Increased factory overheads and raw material costs led to a contraction in net profits. Net sales, on the other hand, rose by 23% to 1,627 crore.

In a jolt to NTPC, the government said that it would cancel allocation of five coal blocks awarded to the company. The five blocks have combined geological reserves of 3 billion tonnes. The decision can hurt NTPC’s long-term fuel securing plans. Read more...

Sesa Goa is close to getting development rights for a $1.6-billion iron ore project in Liberia. If Sesa Goa bags the project, it has to invest $600 million over next three years.

And finally, doctors found an acupuncture needle in the former South Korean president’s lung. Former South Korean president Roh Tae-woo was admitted to hospital with a bad cough. After preliminary tests, doctors were puzzled to find the needle in his lung. Read more...