India Morning Note - Keynote Capitals (January-24-'11)

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Views on markets today

·      Indian markets ended choppy session on negative note on Friday ahead of RBI policy meeting and F&O expiry due to lack of buying conviction from investors at current levels. Good third quarter corporate results and firm European stocks helped Indian markets recoup intraday losses in late trade. Gains in oil & gas, banks, power and consumer durables stocks were offset by losses in IT, FMCG, real estate and pharma stocks. Reliance Industries edged higher ahead of Q3 results, which hit the market after trading hours. Wipro fell more than 4% after the company surprised markets with the resignations of key officials.

·      Market breadth was however marginally strong at ~1.11x as investors bought large cap stocks. FIIs sold equities worth `3.68bn while domestic institutions bought equities of `2.23bn.

·      Asian markets are mixed today as Japanese stocks are up while the Hong Kong shares are flat. The Nikkei was marginally higher with investors buying back resource shares and exporters that have fallen recently. The Hang Seng came down after a positive opening.

·      We expect a positive opening for the Indian markets taking cues from the Asian markets. However, global and domestic uncertainties may lead markets to downward trajectory.

Key events today

·      Opening of the IPO of Omkar Speciality Chemicals Ltd. (price band `95-98 per share), closes January 27.

Economic and Corporate Developments

·      Finance Minister raises the direct and indirect tax collections targets for current financial year, indicating that the government was keen on consolidating its finances.