India Morning Note - Keynote Capitals (April-5-'11)

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Views on markets today

·      Indian markets witnessed broad-based rally and closed positive yesterday to their highest close in nearly three months as capital inflows from foreign institutional investors, strong signs of world economic growth and hopes of strong corporate quarterly earnings boosted investor appetite for equities. Higher auto and cement sales in March 2011 also led the rally. All sectoral indices closed positive with capital goods, IT, auto and banks stocks were major gainers. Banks stocks such as SBI and ICICI Bank surged as investors bet on a pick-up in credit demand in the new fiscal year as companies look to boost capital expenditure in a growing economy. BHEL gained 4% to a near two-month high, after it posted a 40% jump in provisional net profit for FY11. Infosys Technologies gains 2% on improved demand for outsourcing in its key United States market after strong economic data.

·      Market breadth was strong at ~5.11x as investors bought large cap stocks. FIIs bought equities worth `6.04bn while domestic institutions sold equities of `3.89bn.

·      Asian markets are weak today morning. The Nikkei is down led by the auto shares due to weaker supply worries of Toyota Motor Corp. Hong Kong capital markets are closed today.

·      We expect Indian markets to open weak today following the cues from the Asian markets. We may see some profit taking from the investors after yesterday's rally. Rising crude prices is a major worry increasing tensions among the investors.

Economic and Corporate Developments

·      Oil companies to lose Rs174,126Cr on fuel sales in 2011-12 will be the highest even more than 2008-09.

·      The population of the country as per the provisional figures of Census 2011 is 1210.19 million of which 63.72 million (51.54%) are males and 586.46 million (48.46%) are females.