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Stock Market Break Fast 19th March 2015

The market’s happy expectations, even if temporary have come like a dove from the Fed. The word patience is dropped from commentary even as Fed Chair Janet Yellen says, the modification of the forward guidance should not be read as indicating that the committee has decided on the timing of the initial increase in the target range for the federal funds rate. So the room is now wide open for a hike in rates in the next couple of months and there is no surprise here. The Fed has cut its inflation outlook for 2015 and reduced expected US economic growth.

The outlook is a strong start. The indices could come lower soon as profit booking is bound to happen at higher levels. Global cues are mixed for now. The Dow gained 1.27% and S&P 500 was up 1.21%. Nasdaq closed with gains close to a percent. Asian markets are mostly lower.

The government has firmed up a list of PSUs for divestment of minority stakes in the fiscal beginning next month. Topping the charts is BHEL. TPG Capital has reportedly put its 20% stake in Shriram City Union on the block, says a reports. GTL Infrastructure could be in action again on reports that the promoter is looking at exiting the business.

Tata Sons Chairman Ratan Tata, bullish on Jaguar Land Rover, hinted at Tatas manufacturing these marquee brands in the country, in Eastern Europe and in the US, according to reports. Tata reported that the group would do more than just assembling these marquee car brands in India.

The delay in implementation of 224 central sector infrastructure projects resulted in cost overruns to the tune of Rs 2.11 lakh crore, government reportedly said.

Domestic natural gas prices are likely to be reduced by over 10% to $5.02 per unit from April 1, according to reports.Report said that the new rate will be around $5.02 per million British thermal unit (mmBtu) as compared to the current price of $5.61.

Wockhardt shed 2.2 per cent at Rs. 1,878 on reports that the patent office has refused a patent for an oral salt form of diacerein, used to treat osteoarthritis, invented by Wockhardt, on grounds that the claims in the application lack inventive step.

IT stocks led by Wipro and Tech Mahindra were the major losers, down 2 per cent each at Rs. 630 and Rs. 2,807, respectively.

Yes Bank stock ended 2% higher at Rs. 853. The bank in a filing to BSE yesterday said that the board of directors has approved the proposal to seek approval from the regulators for setting up asset management business.

Cement majors – ACC and Ambuja Cements also declined 2 per cent each to Rs. 1,580 and Rs. 254, respectively.

Dynamatic Technologies stock hits 10% upper circuit at Rs. 3,316 after the Central Bank (RBI) lifted its ban on fresh purchases of the stock by FIIs. Reports added, that FIIs can now buy up to 25 per cent of the equity stake in Dynamatic Technologies.

VHCL was locked at the 10% upper circuit at Rs. 6.67 after the company fixed 27 March, 2015, as the record date for the proposed 3:1 bonus share issue.

Indigo is planning to launch an initial public offer (IPO) of at least $400 mn or Rs 2,500 crore in first quarter (April-June) of the next financial year (2015-16), according to reports.

Report said that BHEL divestment is likely in April. The Disinvestment Department has completed overseas roadshows for BHEL stake sale in London, Singapore and Hong Kong, says report.

Report said that the sale of over 12.23 crore shares in BHEL would fetch around Rs 3,200 crore to the exchequer.

Trends in FII flows: The FIIs were net sellers of Rs4.57bn in the cash segment on Wednesday. The domestic institutional investors (DIIs) were also the net sellers of Rs8.83bn, as per the provisional figures released by the NSE.

Global Data: RBA Bulletin AUD, RBA Foreign Exchange Transaction (Feb) AUD, All Industry Activity Index (MoM) (Jan) JPY, SECO Economic Forecasts CHF, Trade Balance (Feb) CHF, Exports (MoM) (Feb) CHF, Imports (MoM) (Feb) CHF, SNB Interest Rate Decision CHF, Economic Bulletin EUR, 10-y Bond Auction GBP, Targeted LTRO EUR Current Account Balance (Jan) EUR, Current Account (Q4) USD, Initial Jobless Claims (Mar 13) USD, Continuing Jobless Claims (Mar 6) USD, CB Leading Indicator (MoM) (Feb) USD, Philadelphia Fed Manufacturing Survey (Mar) USD, EIA Natural Gas Storage change (Mar 13) USD, Visitor Arrivals (YoY) (Feb) NZD and BoJ Monetary Policy Meeting Minutes JPY.

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