India Morning Note - Keynote Capitals (March-25-'11)

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Views on markets today

·      Indian markets closed positive for third straight session yesterday as sentiments in global markets turned positive and fall in crude oil prices. Firm European markets after initial hiccup while higher Asian stocks also help the markets to closed positive. However, tensions in the Middle East and debt problems in the euro zone restrict the market for major gains. Except oil & gas and pharma, all sectoral indices closed positive with real estate, auto, capitals goods and consumer durable were major gainers. Unitech posted its best single-day gain in nearly 16 months, rallying 9.6% after JPMorgan upgraded the beaten down stock to ‘overweight’ from ‘neutral’, citing cheap valuations, reasonable gearing, comfortable liquidity and high embedded land value. Lovable Lingerie ended up 21.6% on firm debut at `249.20 against the issue price of 205 rupees.

·      Market breadth was strong at ~1.27x as investors bought large cap stocks. Both FIIs and domestic institutions bought equities worth `3.07bn and `3.78bn, respectively.

·      Asian markets are up today riding on the rally of the US markets overnight. Rally in the Japanese shares was supported by the technology stocks while the Hang Seng rose on banking stocks.

·      We expect a positive start for the Indian markets as the global cues are strong. However, fresh concerns have came yesterday with the rise in food inflation which increased from 9.42% to 10.05% for the week ended March 12.

Key events today

·      Closing of IPO of Shilpi Cable Technologies Ltd. (subscribed 0.85x as of March 24, 5PM)

Economic and Corporate Developments

·      Food inflation reversed a three weeks of decline to climb back into double digits at10.05% for the week ended March 12 because of rise in prices of cereals, vegetable and fruits.

·      The Department of Telecommunications will soon send notices to 20more service providers for cancellation of licenses for not meeting rollout obligation norms.