India Morning Note - Keynote Capitals (February-11-'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 declined for the third straight day and closed lower to their lowest close in seven months yesterday on weak global markets. Investor concern over the outlook for domestic earnings and political instability over 2G spectrum scam also add the negative in the markets. Food inflation eased in end January on moderating prices of fruits and vegetables but still at higher level raise the concern of further monetary tightening. Telecom operators Bharti Airtel and Idea Cellular shed 2.8% and 2.2%, respectively, after the country's telecoms regulator, TRAI, proposed steep increases in the price of 2G mobile radio waves. Selling pressure in IT, real estate, oil & gas and banks stocks led the markets to fall while buying activity in auto, power and pharma stocks restrict the markets from heavy fall.

·      Market breadth was weak at ~0.57x as investors sold small and mid cap stocks. FIIs sold equities worth `9.54bn while domestic institutions bought equities of `6.37bn.

·      Asian markets are mostly positive today supported by a rebound in energy stocks after rise in crude prices overnight. Japanese markets are closed today while the Hang Seng is up.

·      We expect a positive opening for the Indian markets today led by the Asian markets and some relief from the inflation data yesterday which saw a sharp drop in the food prices.

Economic and Corporate Developments

·      Wholesale food inflation declined to a seven-week low of 13.07% for the week ended January 29 nearly four percentage points lower than the week before.

·      Department of heavy industries has asked the finance minister to create a Rs10bn corpus to fund technology upgradation of the auto components industry.

·      Government has set an ambitious target of US$120bn engineering exports by 2015.