India Morning Note - Keynote Capitals (March-4-'11)

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Views on markets today

·      Indian markets continued its winning streak and closed positive yesterday amid volatile trade after easing crude oil prices as well as food inflation to 10.39% and firm global markets after the news that Libyan leader Muammar Gaddafi accepted peace plan to end crisis in North African country. Food inflation fell to 10.39% for week ended February 19, from 11.49% in the previous week, raising hopes that interest rates may not rise steeply in near future. The upward movement was mainly led by gain in capital goods, auto, consumer durables and real estate stocks while metals, oil & gas and IT stocks witnessed some selling pressure. Bajaj Auto gained 1.2% after the company’s sales rose 21.7% while Hindustan Dorr Oliver firmed 3.5% as the company has bagged orders worth `1.28mn from various state-run firms.

·      Market breadth was marginally strong at ~1.01x as investors bought large cap stocks. Both FIIs and domestic institutions bought equities worth `2.29bn and `95.52Cr, respectively.

·      Asian stock markets are higher today following the rally in the US markets overnight and a retreat in oil prices Thursday. Japan's Nikkei Stock Average and the Hang Seng are up more than 1% today.

·      We expect strong opening for the Indian markets as the cues from the global markets are positive. Besides that softening food inflation is another factor to cheer.

Economic and Corporate Developments

·      Food price index rose 10.39% and the fuel price index climbed 12.56% for the week ended 19 February 2011 against 11.49% and 12.14% for the previous week.

·      Sugar Industry appeals again for exports under open general license as the international prices have surged from $690 tonne to $760 tonne.