Views on markets today · ::keynote

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Views on markets today

·      Indian markets snapped a two-day winning streak and closed lower yesterday tracking weak world markets after comments from the US Fed chairman Ben Bernanke added to worries about the slowing global economy, with outlook turning cautious. US Fed chairman acknowledged an economic slowdown in the United States, but offered no suggestion of further stimulus to support growth, souring sentiment across equity markets and towards the dollar as investors expect US interest rates to remain low for a longer period of time. Except FMCG and consumer durables, all sectoral indices closed negative with pharma, banks, auto and metal stocks were major losers. Interest rate sensitive banking and realty stocks led the decline as the Reserve Bank of India's (RBI) is expected to raise its key lending at its mid-quarter monetary policy review on 16 June 2011. Bharti Airtel erased early losses and closed flat after a top executive told Reuters the company is on target to generate $5bn in revenue from the African continent. Hindustan Copper closed 2.3% higher after the company said it may not sell shares in a follow-on offer, following a jump in cash reserves on the back of soaring copper prices.

·      Market breadth was however marginally weak at ~0.96x as investors sold large cap stocks. Both the FIIs and domestic institutions bought equities worth `50.43Cr and `85.47Cr respectively.

·      Asian markets are mostly lower today following their US counterparts, with Hong Kong shares down for a sixth straight day and Japanese shares falling as yen moves higher.

·      We expect a weak opening for the Indian markets given that Asian markets are weak today. Besides that markets may remain volatile ahead of the inflation data today.

Key events today

·      Announcement of food and fuel price inflation data

Economic and Corporate Developments

·      Finance Minister urged CBEC to achieve revenue target of `3929.08bn this fiscal.