India Morning Note - Keynote Capitals (October-21-'10)

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Views on markets today

·      Indian markets continued their losing streak and ended a choppy session on negative note after weak global cues on following China's surprise move to raise interest rates and fund offload their position in last trading hour. The down-move was mainly led by profit booking in metal, real estate, consumer durable and FMCG stocks while capital goods and pharma stocks witnessed some buying activities. Metal producers declined as base metals prices fell in London and Shanghai following a sell-off in the international market on Tuesday after China's first rate rise since 2007. HDFC Bank dropped 1.2% after the bank met street estimates with a 33% rise in quarterly net profit.

·      Market breadth was however marginally weak at ~0.59x as investors sold large cap stocks. FIIs bought equities worth `16.35Cr while domestic institutions sold equities of `27.5Cr.

·      Asian stock rose following the gains in the US markets overnight. The Nikkei gained on falling yen which recovered exporter stocks. Financial stocks led the Hong Kong shares.

·      The Indian markets are expected to open flat with positive tracking firm Asian markets. Quarterly results of ACC and Ambuja Cement will keep cement stocks in momentum. Tata Chemicals may be in focus today after the company has signed a share purchase agreement to buy 100% equity ofSouth Africa-based Grown Energy Pty for $1.1 million.

Key events today

·      Closing of IPO of Coal Indian Ltd. (subscribed 11.85x as of October 20, 5PM)

·      Announcement of food and fuel price inflation data

Economic and Corporate Developments

·      SEBI is set to unveil new rules on takeover of public listed firms based on recommendations on a committee headed by C Achuthan.

Iron Ore exports falls most in September, down by 47% at ~3mt.

Buzzing Stocks

·       UIDAI has shortlisted nine IT companies, including TCS, IBM, Wipro, HCL Tech, Mahindra Satyam and Tech Mahindra, for the managed services provider contract worth around Rs20bn.

·       Tata Chemicals acquires has signed a share purchase agreement for acquiring a 100% stake in South African firm for US$1.1mn.

·       L&T plans to achieve financial closure for the Rs121.3bn Hyderabad Metro Rail project by next March.

·       Opto Circuits is acquiring US-based Cardiac Science Co-operation between US$80-85mn in cash.

·       Wockhardt Hospitals plans to invest up to Rs7bn to double its bed capacity to 2,000 by 2013.

·       Polaris Software will increase its capex spend nearly three times to Rs1bn in the current fiscal year to meet the upsurge in demand.