India Morning Note - Keynote Capitals (March-10-'11)

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Views on markets today

·      Indian markets ended higher amid a volatile trade as investors indulged in adjusting their portfolios on easing political concerns and dropping crude oil prices. However, concerns over unrest in the Middle East weighed on investor sentiment. Except pharma and IT, all sectoral indices closed positive with real estate, consumer durables, auto and power stocks were major gainers. Ipca Laboratories gained 4.4% as its new formulations manufacturing unit at Indore has received approval from the UK's Medicines and Health Products Regulatory Agency while Oberoi Realty rose 2.1% after Bank of America-Merrill Lynch has initiated coverage on the real estate developer with a "buy" rating and a price target of `290.

·      Market breadth was strong at ~1.35x as investors bought small and mid cap stocks. Both FIIs and domestic institutions bought equities worth `1.31bn and `1.13bn, respectively.

·      Dull US markets overnight and the Japan's downward revision of GDP led the Asian shares down today. Japanese stocks fall, as weakness in US tech shares weigh on their Tokyo-listed peers. Hong Kong shares declined ahead of February trade data from China, with stocks in the life insurance as well as mining and metals sectors among the laggards. Japan's revision of its October-December gross domestic product result downward, registering a contraction of 1.3% from the year-earlier period, compared to an initially reported 1.1% contraction also pulled down the markets.

·      We expect a weak start for the Indian markets as the cues from the global markets are not encouraging. Besides that inflation data and spiralling crude prices will keep markets volatile.

Key events today

·      Listing of IPO of Acropetal Technologies Ltd. (NSE: ACROPETAL, BSE code: 533330), issue price: `90 per share.

·      Announcement of food and fuel price inflation data

Economic and Corporate Developments

·      Car sales rise 25% in February to 189,000 units.

·      Direct tax collection up 20.7% in April-February.