India Morning Note - Keynote Capitals (October-1-'10)

Views on markets today

·       Indian markets closed positive yesterday on fund buying in the heavyweights. However, the markets open on negative note tracking weak global markets, but with the recovery in European markets, Indian markets recovered all its loss and closed positive. Mahindra Satyam lost ~9% after the company reported a net loss for 2009 and 2010, giving the first view of its financials nearly two years after it was hit by India's biggest corporate fraud. The upward movement was mainly led by gain in FMCG, metal and bank stocks while oil & gas, consumer durable and auto stocks witnessed selling pressure.

·       Market breadth was however negative at ~0.79x as investors sold large cap stocks. FIIs bought equities worth `24.96Cr while domestic institutions sold equities of `15.21bn.

·       The Asian markets are trading mix this morning. The Nikkei is trading higher helped by short-covering after sharp falls the previous day and after better-than-expected U.S. economic data provided a degree of optimism. However, the Hang Seng is trading lower.

·       The Indian markets are expected to open higher tracking Asian markets.

Key events today

·       Closing of IPO of Bedmutha Industries Ltd. (subscribed 0.65x as of September 30, 5PM)

Economic and Corporate Developments

·       Food inflation increased to 16.44% in the week ended September 18.

·       India’s current account deficit rose sharply in the quarter ended June 30 to US$13.7bn fromUS$4.5bn a year ago due to lower invisible surplus and growth in imports outpacing exports.

·       Fiscal deficit falls 17% to Rs1.5tn during Apr-Aug 2010.

Buzzing Stocks

·       L&T bags Rs7bn order from various customers for construction related work.

·       L&T infra files for Rs4.5bn bonds public issue.

·       ICICI Bank estimates loan growth in the current financial year at around18%; higher than an earlier forecast of 15%.

·       SAIL plans to add 1,725 MW of power generation capacity.

·       Maruti Suzuki expects to record its highest-ever monthly sales in September with a growth of 32-33% yoy.

·       Reliance Capital has acquired a 4.98% stake in an infra developer Trinethra Infra through an open market transaction.

·       Power Grid Corporation is establishing a 1200-kV National Test Station at Bina in Madhya Pradesh.