Sensex slides, down 0.5% at 15,304.01 vs earlier high of 15,463.09, as profit-taking kicks in after jump of nearly 14% in last 2 weeks; immediate support tipped at 15,225; heavyweight Reliance Industries (500325.BY)
remains weak on 1Q earnings, down 4.5% at INR1,923.20 – biggest percentage loser; profit-booking in autos, banks that rallied last week also weighs, 13 of 30 index issues down; “This weakness was expected after the recent rally but I don’t think we are going to see any sharp fall from these levels,” says Ranjit Kapadia, vice-president, institutional research, HDFC Securities. ONGC (500312.BY) down 3.4% at INR1,088, Tata Motors (500570.BY) down 3.2% at INR361.50, Maruti Suzuki (532500.BY) down 1.4% at INR1,358.
Italian government bonds are not overvalued versus German peers, despite the substantial tightening in the BTP-bund spread during the past few months, says Dresdner Kleinwort strategist Marcel Bross. “In fact, our model renders BTPs on the cheap side versus bunds,” he says, adding that the major drivers of the BTP-bund spread argues for continued tightening. Therefore, Dresdner Kleinwort reiterates its recommendation to stay overweight BTPs at the expense of bunds, Bross says.
Nomura upgrades Lloyds Banking Group (LLOY.LN) to buy from reduce, and lifts target price to 100p from 58p. “As substantially all the highest-risk assets are believed to be included in the asset-protection-scheme, we believe Lloyds’ tangible book value per share has among the least downside
risk of major banks, after the first loss piece is exhausted,” it says. Adds
that with signs that economies and asset values are stabilising, markets are
beginning to discount recovery and a turn in the credit cycle. “While we still
see risks around credit quality, the read-across from US and European banks
indicates some positives,” it says. Shares +3.1% at 80p.