India Morning Note - Keynote Capitals (October-28-'10)

Visit http://indiaer.blogspot.com/ for complete details �� ��

Views on markets today

·      Indian markets ended on a weak note for second straight session yesterday, as traders squared off positions ahead of October F&O expiry and fall in banks stocks on rate hike worries dragged markets lower. Weak cues from European markets due to rise of US dollar also dampened sentiments. All sectoral indices, except metals, ended in the negative terrain with real estate, FMCG, banks and IT were the major loser. NTPC fell ~3% as it posted nearly flat September-quarter net profit. While Tech Mahindra dropped as much as 2.7% after the company’s second-quarter profit fell more than 10% as it booked a charge related to its shareholding in Mahindra Satyam.

·      Market breadth was weak at ~0.7x as investors sold large cap stocks. Both FIIs and domestic institutions sold equities worth `9.07Cr and `5.18bn respectively.

·      The Asian markets are trading marginal lower this morning. The Nikkei edged down as investors were reluctant to trade actively at the height of the earnings season and before a Bank of Japan policy meeting, but shares of firms that have reported strong results were in demand. The Hang Seng is also trading lower.

·      The Indian markets are expected to open lower weak Asian markets and investors will roll over their position on October F&O expiry. Bharti Airtel may see some movement as the company and Aircel are looking to buy Qualcomm's wireless broadband business in India.

Key events today

·      Announcement of food and fuel price inflation data

Economic and Corporate Developments

·      India has slipped 10 places to rank 88th out of 110 on the 2010 Global Prosperity Index.

Buzzing Stocks

·       HPCL plans to add a new crude distillation unit (CDU) at its Vizag refinery which will raise the overall capacity to nearly 300,000 barrels per day (bpd).

·       Nagarjuna Construction has received orders worth Rs540Cr for infrastructure related works.

·       Phillips Carbon Black will invest Rs1,200-1,250Cr in next three years in diversification and greenfield carbon black projects.

·       SRF Limited plans to invest $52mn to pick a majority stake in a 80:20 joint venture with Dhaka-based Nitol Niloy Group to set up a polyester film manufacturing plant in Bangladesh.