India Morning Note - Keynote Capitals (March-7-'11)

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Views on markets today

·      Indian markets touched a five-week high and closed volatile session on flat note on Friday on profit booking amid firm global trends. Indian markets opened positive taking cues from firm Asian markets but pared initial gains on concern of high crude oil. The downward movement was mainly led by selling pressure in capital goods, metal, FMCG and consumer durables stocks while banks, auto and IT stocks witnessed some buying activities which gave some support to the markets. Strides Arcolab gained 4.4% after the company’s fully owned unit Onco Therapies received European Union approval for its oncology drug carboplatin while Areva T&D fell 2.3% after Citigroup downgraded the stock to "hold" from "buy" and cut the price target to `290 from `340.

·      Market breadth was weak at ~0.94x as investors sold large cap stocks. FIIs bought equities worth `5.85bn while domestic institutions sold equities of `2.29bn.

·      Asian markets are lower today following the US counterparts as the concerns regarding unrest in Libya increased the Crude prices.

·      We expect a weak opening for the Indian markets as the worries regarding the global unrest are burgeoning. Besides that the political uncertainties in India makes markets more vulnerable.

Economic and Corporate Developments

·      Foreign exchange reserves went up by US$158mn to US$301bn in the week ended February 25.

·      Garments exports up 19.5% in January; highest in 2010-11.

·      Deposits of scheduled commercial banks in the country grew by 16.88% to `46,01,925Cr, while the credit offtake rose by 17.08% per cent to `33,45,619Cr in 2010

·      The government plans to widen the definition of real estate in its FDI policy to include consultants, advisers, valuers and brokers.

·      Crude imports down 2.2% at 11.2mn tonnes in January.