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

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Views on markets today

·      Indian markets bounced back and closed positive yesterday taking cues from other Asian peers and on the reports that companies across sectors have paid significantly higher advance tax in Q4 March 2011 compared with the year-ago period. The world markets gained as value buying emerged on views that most negatives were already priced in. However, the market came off the day's high as European markets reversed initial gains. All sectoral indices closed positive with real estate, banks, consumer durables and pharma stocks were major gainers. Rate sensitive sectors led the rally ahead of the Reserve Bank of India's policy review meet. IVRCL Infrastructures rose 2.2% after the company had secured orders worth `5.65bn.

·      Market breadth was strong at ~1.7x as investors bought large cap stocks. FIIs sold equities worth `1.34bn while domestic institutions bought equities of `3.26bn.

·      Asian markets declined sharply today following the cues from the US markets and increasing worries about the Japanese nuclear disaster. Japanese shares pared the deep losses they suffered Thursday morning as the yen retreated after hitting a record high against the US dollar and as Japanese military conducted operations to cool the stricken No. 3 reactor at the Fukushima nuclear facility. Hong Kong shares tumbled today as fears over Japan's nuclear radiation escalated, slapping shares across sectors.

·      We expect a weak opening for the Indian markets tracking the cues from the Asian markets. The investors may remain more risk averse considering the uncertainties caused by the recent global events and their impact on the crude prices. We may also see some volatility today as the weekly food price inflation data may give some indications for the markets.

Key events today

·      Announcement of monetary policy by the RBI

·      Announcement of food and fuel price inflation data

Economic and Corporate Developments

·      Advance tax collection by the top 100 companies has increased by 24% to `566bn this fiscal.