India Morning Note - Keynote Capitals (November-9-'10

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Views on markets today

·      Indian markets ended negative yesterday after shares climbed towards record-high level in early trade as investors locked in profits after market scaled record closing highs. Weak European markets and lower US index futures also dampened investor sentiments. IT, consumer durable, banks and capital goods stocks were the major looser while pharma, real estate and metal stocks witnessed some buying. Coal India, which made a stellar debut last week, fell 5.5%, as traders locked in gains. Power Grid Corp declined 3.6% after the company fixed the price band for its $1.7bn share sale at a 12-17% discount to its Friday's closing.

·      Market breadth was weak at ~0.95x as investors sold large cap stocks. FIIs bought equities worth `5.05bn while domestic institutions sold equities of `4.71bn.

·      The Asian markets are trading lower this morning. The Nikkei edged lower as investors took profits after its surge of more than 6 percent in the last four sessions and reflecting the yen's firmness against the euro. The Hang Seng is also trading lower.

·      Indian markets are expected to open with a cautious start following the weak Asian markets. Oil marketing companies' stocks may see some movement as they have raised fuel price by 31-33paise a litre.

Key events today

·      Opening of the FPO of Power Grid Corporation of India Ltd. (price band `85-90 per share), closes November 12.

Economic and Corporate Developments

·       India and the US are working to jointly set up a US$10bn infrastructure debt fund to finance large road, port and railway projects through public-private partnership.

·      The government has disbursed agricultural credit of Rs897bn in the quarter ended June — 24% of the target of Rs3.8tn for the financial year.

Buzzing Stocks

·       Reliance Industries’ telecom arm, Infotel is in talks to borrow an additional $1.5bn to fund roll out of operations and buying equipment.

·       Glenmark Pharmaceuticals is close to becoming the first Indian company to develop an original novel chemical entity (NCE) to treat diseases.

·       Indian Oil Corp has hiked petrol prices by Rs0.32 per litre with immediate effect.

·       Power Grid sets US$27bn capex target for 2012-2017.

·       GVK Power and Infrastructure has signed an agreement with 3i India Infrastructure Fund, to raise about Rs12bn, offering a 21.1% stake in GVK Energy Ltd, a wholly-owned subsidiary of GVKPIL.

·       Amara Raja Power, a subsidiary of the Amara Raja group, launched a swift battery charger, offering a comprehensive power solution which reduces turnaround time to just four weeks from three months.

·       Hindalco Inds. has stopped copper cathode production at its Dahej plant in Gujarat due to the breakdown of cooling tower of Sulfuric Acid Plant- 3 of the copper plant.

·       HCL Technologies has signed a deal with Novotech to enter life sciences market in Australia.