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Market Ahead, January 17: Q3 results by RIL, HUL to steer market indices on Thursday
Today on Market Ahead: 1. Q3 results by RIL, HUL to steer market indices on Thursday 2. Return on equity for Nifty firms slip to record low of 12.9% in January 3. RIL to raise Rs 2,500 crore via bonds issue to repay loans, fund capex
Market heavyweights such as Reliance Industries (RIL) and Hindustan Unilever (HUL) will be in focus on Thursday ahead of their December quarter results later in the day. Apart from this, developments around Brexit, movement in rupee, crude oil and other global cues are likely to sway investor sentiment.
Among other corporate results, nearly 20 companies including Federal Bank and Cyient are expected to announce their Q3 results during the day. Investors are also likely to keep a tab on IT bellweather Wipro ahead of its December quarter earnings which is scheduled on Friday.
The rupee weakened further by 19 paise Wednesday to close at 71.24 against the US dollar amid a strengthening greenback and fresh capital outflows.
SGX Nifty
The Nifty futures on Singapore Exchange (SGX) were trading at 10,947.50, up 22.50 points or 0.21 per cent in early trade.
Global Markets
Asian shares crept higher on Thursday as upbeat bank earnings bolstered Wall Street, while an anti-climactic end to the latest chapter in the Brexit saga gave sterling a moment’s peace.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent, with Australia and South Korea's KOSPI ahead by 0.2 per cent each. Japan's Nikkei climbed 0.3 per cent.
On Wall Street, the Dow Jones Industrial Average rose 141.57 points or 0.59 per cent to 24,207.16, the S&P 500 gained 5.8 points or 0.22 per cent to 2,616.1 and the Nasdaq Composite added 10.86 points or 0.15 per cent to 7,034.69.
Oil Prices
US oil prices inched down on Thursday, with traders worried about the strength of demand in the United States after gasoline stockpiles there grew last week by far more than analysts had expected.
US West Texas Intermediate (WTI) crude futures were at $52.20 per barrel, down 11 cents, or 0.2 per cent, from their last settlement. WTI futures closed up 0.4 per cent on Wednesday. International Brent crude oil futures had yet to trade, after closing up 1.1 per cent in the previous session.
The return on equity (RoE) ratio for top listed companies continues to deteriorate despite the uptick in earnings growth.
The average RoE for the top 50 listed firms, which are a part of the Nifty, has declined to a record low of 12.9 per cent, against 13.6 per cent last year.
The ratio was 15.5 per cent in January 2015 and 23.1 per cent in December 2007, on the eve of the big market correction of 2008.
In the last one year, the index companies’ underlying earnings per share has risen 3.5 per cent from Rs 401 in January 2018 to around Rs 415 now.
Over the same period, book value per share, or net worth, has risen 8.7 per cent — leading to a decline in their return ratio.
Analysts attribute this to lower-than-expected profit growth.
Reliance Industries Limited (RIL) plans to launch its Rs 2,500-crore bonds issue in the next few days to repay its old loans and fund capital expenditure (capex.
The company has also initiated talks with banks to raise funds both in India and abroad for its $10 billion oil refinery planned in Gujarat.
“More fundraising will follow in the coming weeks both in India and from the overseas markets,” said a source close to the development.