India Morning Note - Keynote Capitals (April-27-'11)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Views on markets today

·      Indian markets slides for the second straight day yesterday and closed marginally lower on political worries and ahead of the RBI’s policy statement next week when it is widely expected to raise interest rates again as it continues its battle with inflation. However, the markets showed smart recovery in the last couple of hours of trade on firm European equities and higher US index futures. Volatility was high as traders rolled positions in the F&O segment ahead of the expiry of the near-month April 2011 contracts. The downward movement was mainly led by selling pressure in consumer durables, oil & gas, real estate and IT stocks while pharma, FMCG, metal and capital goods stocks witnessed some buying activities which help the markets to recover and close flat. Cement stocks like ACC and UltraTech Cement rallied 1.2% and 2.3%, respectively, after reporting forecast-beating quarterly earnings. Aventis Pharma rose 3.4% after the Indian unit of French drugmaker Sanofi-Aventis posted a forecast-beating 40 percent rise in March-quarter net profit.

·      Market breadth was weak at ~0.82x as investors sold large cap stocks. FIIs sold equities worth `5.54bn while domestic institutions bought equities of `1.61bn.

·      Asian stocks rose sharply today following their US counterparts ignoring the news that S&P cuts outlook on Japan sovereign rating and drop in Japanese retail sales by 8.5%. Japanese shares are up led by technology and electronics stocks. The Hang Seng is up due to rise in real estate shares.

·      We expect positive Indian markets today due to encouraging Asian markets. However, we expect investors to remain cautious ahead of the RBI's credit policy on May 3, which may take strict measures to improve inflation numbers.

Key events today

·      Opening of the IPO of Servalakshmi Paper Ltd. (price band `27-29 per share), closes April 29.

Economic and Corporate Developments

·      India's apparel export increased marginally by 0.1% at `509bn in FY11 from `508bn in FY10.

·      Diesel prices may see an increase of around ` 2 per litre next month, providing marginal relief to the oil marketing companies OMCs.