India Morning Note - Keynote Capitals (January-21-'11)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Views on markets today

·      Indian markets closed with moderate gains after showing a smart recovery in the last couple of hours of trade shrugging off weak global markets. Sentiment was helped after data showed food inflation eased for the second straight week in January, tracking lower fruit and vegetable prices. Interest rate sensitive banking stocks reversing initial losses after easing of food inflation. Losses in oil & gas, FMCG, real estate and auto stocks were offset by gains in banks, IT and pharma stocks. SKS Microfinance gained 3.8% after the central bank temporarily relaxed rules for bank loans to the microfinance sector and set out proposed guidelines for lenders to the poor.

·      Market breadth was however marginally weak at ~0.94x as investors sold small and mid cap stocks. FIIs sold equities worth `9.43bn while domestic institutions bought equities of `2.56bn.

·      Asian markets were mostly lower Friday led by resources stocks after sharp decline in commodities prices and a report that a China interest rate hike may only be weeks away. Both the Hang Seng and the Nikkei dropped today.

·      We expect the Indian markets to open weak today as the Asian markets are mostly lower today. Investors may remain watchful for the Indian markets till the time inflation gives relief. The budget in the next month and current earnings season will keep the markets volatile.

Key events today

·      Closing of FPO of Tata Steel Ltd. (subscribed 0.48x as of January 20, 5PM)

Economic and Corporate Developments

·      Food inflation fell to 15.52% in the week ended 8 January 2011 from 16.91% in the previous week due to decline in price of primary articles price. However, Fuel inflation remained unchanged at 11.53%.

·      As per Mosaic outlook, fertiliser prices in the global market set to rise. This could also impact India negatively.