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Opening Bell 12 May | Last day of polling presages market volatility

LiveMint logoLiveMint 12-05-2014 Krishna Merchant

Mumbai: All eyes are on the election verdict on 16 May which will decide the political formation in India. Markets are expected to remain volatile ahead of the election outcome, with a clear win for the National Democratic Alliance (NDA) likely to extend the rally while a fractured mandate could be disastrous for the equity markets.

Markets in Asia are trading mixed on Monday morning as investor’s reacted to comments by the Chinese president that the nation must adapt to a new normal of slower growth, reports MarketWatch. China’s Shanghai Composite was trading up 0.6% while Hong Kong’s Hang Seng was down 0.3% and Japan’s Nikkei Stock Average was off 0.2% ahead of the current account balance data for March.

Wall Street indices ended higher following dovish central bank comments by the US Federal Reserve and the European Central Bank. The Dow Jones Industrial Average closed up 0.2%, S&P 500 closed flat and the Nasdaq Composite was up 0.5%.

In India, factory output data for March will be released today and is expected to decline 1.5%, dropping in four of the past five months, according to Reuter’s poll. India’s consumer price inflation figures for April are also out, and expected to show prices rose 8.5% year on year due to higher food inflation.

Jet Airways (India) Ltd shares will be in focus as it is paring domestic operations to bring down losses from high operating costs and intense competition. Jet Airways which sold 24% stake to Etihad Airways PSJC will pull out from loss making routes and shut some domestic stations, reports Mint.

Dena Bank shares will see some action as the state-run lender has sought Rs1,200 crore in capital from the government in FY15 on the basis of business growth projections of 18-20%, reports Economic Times. The government holds 58% stake in the bank which limits the bank’s options for raising capital.

United Spirits Ltd shares may be under pressure following a Business Standard report that sale of its subsidiary Whyte and Mackay to the Philippines’ Emperador might face regulatory scrutiny following the Karnataka high court’s December order of a probe into diversion of Rs4,000 crore in 2007 by USL to British Virgin Islands, a tax haven, for its W&M acquisition.

Tata SIA Airlines Ltd, the joint venture between Tata group and Singapore Airlines, plans to focus initially on metro routes between Delhi and other big cities as it prepares to start flights from 1 September, reports Mint.

Tilaknagar Industries Ltd shares will see some action after it rejected claims on the Mansion House brand rights by Allied Blenders and Distillers Pvt. Ltd. Tilaknagar said that it remains the sole and independent manufacturer of Mansion House liquor products and denied it is in negotiations with Allied Blenders.

Sahara is contemplating exiting from its finance business by December 2017 to focus on retail, real estate, life insurance and mutual fund as it is facing tight cash flow according to Subrata Roy’s letter to the prime minister Manmohan Singh, reports Economic Times.

Lastly, happiness matters most to the average Indian following which they care more about their pay than do most others in South Asia, according recently released survey by the Paris-based Organisation for Economic Co-operation and Development.

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