India Morning Note - Keynote Capitals (October-18-'10)

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Views on markets today

·     Indian markets ended lower for second consecutive day on Friday as investors booked profits on concerns of global economic recovery. The investors was also opted to book profit ahead of the $3.5 billion share sale of state-run Coal India, the country's largest ever IPO. All sectoral indices closed lower with IT, auto, banks and metal stocks were major looser. Infosys Technologies led the losses and closed 3.4% lower, after rising as much as 2% to a record high of `3,249 on forecast-beating September quarter earnings.

·     Market breadth was weak at ~0.48x as investors sold large cap stocks. Both FIIs and domestic institutions sold equities worth `1.12bn and `10.53bn respectively.

·     Asian markets are mixed today as the short recovery has seen in the Japanese markets while the Hong Kong shares declined as resource-sector stocks and index-heavyweight HSBC Holdings PLC fell on weak overseas cues.

·     The Indian markets are expected to open flat with negative bias and may recover from lower levels.

Key events today

·     Listing of IPO of Commercial Engineers & Body Builders (NSE: CEBBCO, BSE code: 533272), issue price: Rs127 per share

·     Opening of the IPO of Coal India Ltd. (price band `225-245 per share), closes October 21.

Economic and Corporate Developments

·     WPI based inflation rose 8.6% in September, higher than the 8.5% yoy rise seen in August.

·     GSM-based mobile operators added 12.4mn subscribers in September to take their total tally to 494mn.

·     NSE and BSE will start the 15-minute pre-open session call auction from today to reduce price volatility and better price discovery.

Buzzing Stocks

·     State Bank of India would raise Rs10bn by issuing long-term bonds of 10 and 15-year duration to retail investors.

·     ONGC reported oil find in its pre-NELP on land block in Cauvery Basin and gas discovery in its shallow offshore block in Krishna Godavari Basin.

·     Tata Motors' group global sales grew 19% to 86,996 units in September and 38% to 0.51mn units this fiscal.

·     ABG Shipyard takes control of Western Shipyard by raising its stake to 60.3% from 19.7%; however, there were no details on the timing of the open offer.

·     GMR Infrastructure says it was entering the solar power area with a 25MW photovoltaic plant to be set up in Gujarat.

·     Lupin has entered into a settlement with Warner Chilcott Plc and its subsidiary, on pending patent litigations involving oral contraceptive products.

·     Gitanjali gems to acquire Italy’s DIT brands in a month’s time.

·     Dredging Corp. has secured a capital dredging contract worth Rs 1.7bn from Ennore port.