India Morning Note - Keynote Capitals (October-14-'10)

Views on markets today

·      Indian markets surged to hit 33-month closing highs yesterday as world stocks rose on growing expectations that the US Federal Reserve will take further measures to boost the slowing economic recovery and continued foreign fund inflows. All sectoral indices closed positive with IT, capital goods, real estate and FMCG stocks were major gainers. Non-ferrous metals producer Sterlite Industries and aluminium producer Hindalco jumped 2.3% and 2.7% as copper prices in London and New York extended gains to touch 27-month highs,

·      Market breadth was strong at ~1.81x as investors bought large cap stocks. FIIs bought equities worth `21.02Cr while domestic institutions sold equities of `13.54bn.

·      The Asian markets are trading higher this morning. The Nikkei is trading positive on jump in resource stocks as dollar weakness fuelled a climb in commodity prices.

·      The Indian markets are expected to open higher and test new 33-month high tracking the global markets. Mahindra Satyam will be in focus after the company has secured a contract to provide IT services to the state of Kentucky in the United States.

Key events today

·      Listing of IPO of Bedmutha Industries Limited (NSE: BEDMUTHA, BSE code: 533270), issue price: Rs102 per share

·      Listing of IPO of Sea TV Network Limited (NSE: SEATV, BSE code: 533268), issue price: Rs100 per share

·      Closing of IPO of Prestige Estates Projects Ltd. (subscribed 0.50x as of October 13, 5PM)

Economic and Corporate Developments

·      FDI in India dipped for third consecutive month by about 60% to US$1.33bn in August.

·      Indirect Tax collection climbed more than 44% in first half of the current fiscal yoy.

Buzzing Stocks

·       IOC, HPCL and BPCL may have to absorb part of the losses incurred on sale of subsidized LPG and kerosene in the first half of this fiscal.

·       The government is set to divest 10% of its stake in IOC, and 5% in ONGC next year.

·       JSW Steel Ltd is considering putting its overseas coal and iron ore assets into a unit for a share sale to fund expansion.

·       Dabur has completed the Rs3.24bn acquisition of Turkey-based personal care products maker Hobi Kozmetik Group.

·       OBC has requested the government to provide Rs10bn as capital support to enhance its business.

·       Lanco Infra ties up funds for power expansion project.