India Morning Note - Keynote Capitals (September-29-'10)

Views on markets today

·         Indian markets ended volatile session on a flat note yesterday on weak global markets and profit booking by the investors. However, during the last trading session, market witnessed a sharp U-turn and pared almost all the losses as buying interest emerged among the power, real estate and bank stocks after recovery in European markets and US index futures. While oil & gas IT and pharma stocks witnessed profit booking and closed negative. M&M gained ~2.5% as the company plans to raise prices of its vehicles by `3,000-8,000 rupees, effective Oct. 1, due to higher input costs and new emission norms.

·         Market breadth was negative at ~0.82x as investors sold large cap stocks. FIIs bought equities worth `5.73Cr while domestic institutions sold equities of `9.05bn.

·         The Asian markets are trading higher this morning. The Nikkei is trading up on window-dressing before the end of Japan's fiscal first half, but it pared gains as the yen's retreat faded and resistance held strong. The Hang Seng is also trading higher.

·         The Indian markets are expected to open higher in line with the Asian markets as US markets were closed positive despite a drop in consumer confidence. Mahindra Satyam will be in focus as it will announce results for FY09 and FY10 today. Sterlite is also likely to hog limelight as it has been told to shut its copper smelter at Tuticorin.

Key events today

·         Listing of IPO of Indosolar Ltd. (NSE: INDOSOLAR, BSE code: 533257), issue price: `29 per share

·         Closing of IPO of Sea TV Network Ltd. (subscribed 1.74x as of September 28, 5PM)

Economic and Corporate Developments

·         The Asian Development Bank (ADB) has raised the 2010 economic growth forecast for India to 8.5%, from 8.2% estimated in April.

·         Government plans to invest US$20.8bn for expanding major ports.

Buzzing Stocks

·         BP and Reliance Industries are likely to discuss divestment and joint venture opportunities between the two companies.

·         Tata Steel would finalise plans to refinance $5.4-billion loans for its British unit Corus this week.

·         Reliance Power is planning to commission its entire portfolio of projects by 2017, which would be around 35,000 Mw.

·         Larsen & Toubro will make L&T Infrastructure Development Projects (L&T IDPL), a wholly-owned subsidiary, by buying 14% from IDFC Private Equity and JP Morgan Chase for at least `7.4bn.

·         Reliance Capital may issue bonus shares next year when it completes 25 years of existence.

·         GVK Power & Infrastructure is scouting for coal and gas assets overseas for US$200mnto US$1bn to fire its power projects in India.

·         Aban Offshore has approved plans to raise over `43bn from foreign as well asdomestic markets through QIP and issuing FCCBs.