India Morning Note - Keynote Capitals (February-17-'11)

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Views on markets today

·      Indian markets ended range bound session on a flat-to-positive note yesterday despite positive global cues on lack of broad buying interest. Concerns on the domestic political front eased after Prime Minister said there is no danger of any inner tensions that may lead to the break-up of the ruling Congress-led coalition government at the Centre. Meanwhile retail participation helped the broader markets outperform the main indices. Buying activities in real estate, metal, consumer durable and capital goods stocks led the markets to close positive. However, profit booking was seen in pharma, auto, oil & gas and power stocks after a sharp run. Jindal Steel & Power gained 3.3% after it received conditional approval from the environment ministry to build a 6-million-tonne steel plant in Orissa.

·      Market breadth was strong at ~1.53x as investors bought small and large cap stocks. Both FIIs and domestic institutions sold equities worth `2.3bn and `68.49Cr, respectively.

·      Asian shares are moderately positive after strong close of the US markets overnight. Japanese shares added to previous gains led by the exporters and banks. The Hang Seng got support from gains in HSBC, but mainland property sinks after Beijing sets stricter housing policy.

·      We expect a positive opening for the Indian markets following the cues from the global markets. However, the markets may see volatile trades ahead of the weekly food inflation data today.

Economic and Corporate Developments

·      As per Centre for Monitoring Indian Economy (CMIE), India's GDP is likely to grow by an impressive 9.2% in FY 11.

·      The government is planning to ask ministries for a list of ailing companies under them along with their revival plans, a move that will help it decide on strategic stake sales in the public sector units.