India Morning Note - Keynote Capitals (March-30-'11)

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Views on markets today

·      Indian markets extended its gain for sixth consecutive session, longest winning streak in more than six months, and closed positive yesterday as inflation worries eased along with a decline in crude oil prices and buying by foreign funds recently boosted sentiment. While buying activity was seen in the benchmarks, traders booked profits in broader markets. All sectoral indices closed positive with auto, metal, IT and real estate stocks were major gainers. Telecom stocks were in demand on reports the government is helping the firms secure loans after the controversial 2G spectrum allocation virtually blocked flow of funds while auto stocks rose ahead of the release of March 2011 sales figures. State-run oil marketing companies rallied after oil prices eased, falling for a third straight day, as Libyan rebels advanced against government forces.

·      Market breadth was however weak at ~0.61x as investors sold small and mid cap stocks. FIIs bought equities worth `12.91bn while domestic institutions sold equities of `4.74bn.

·      Asian markets are strong today spurred by overnight gains in the US markets and expectations of strong earnings reports. Both the Hang Seng and the Nikkei is sharply up today.

·      We expect a positive start for the Indian markets today tracking the global cues. Softening domestic as well as global political issues may help the markets to open higher today. However, profit taking cannot be ruled out.

Key events today

·      Listing of IPO of PTC India Financial Services Ltd. (NSE: PFS, BSE code: 533344), issue price: Rs28 per share.

Economic and Corporate Developments

·      Infrastructure sector growth for the month February was at 6.8% Vs 4.2% (YoY) while the same for April-February period was at 5.7% Vs 5.4% (YoY).

·      FDI in India has declined by 30% to US$1.2bn in February, 2011on the back of the European financial crises.