India Morning Note - Keynote Capitals (November-12-'10)

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Views on markets today

·      Indian markets closed negative yesterday as investors remained cautious ahead of the outcome of meetings of G-20 world leaders in South Korea and subdued world markets providing no support the markets. Profit booking at higher level also led the markets to closed negative. Ease in food price inflation to 12.30% however does not support the markets. All sectoral indices closed lower with real estate, oil & gas and IT stocks were major loser. DLF plunged 4.4%, after its quarterly net profit declined 5% versus a year ago amid rising interest rates and higher land and construction costs.

·      Market breadth was weak at ~0.76x as investors sold large cap stocks. Both FIIs and domestic institutions sold equities worth `60.42Cr and `2.69bn, respectively.

·      Taking weak cues from the US markets, Asian markets are lower today. Bank stocks dragged both the Nikkei and the Hang Seng. Sentiment was hurt by the decline in the US markets on Thursday, dragged by a plunge in Cisco Systems's shares and concerns over European sovereign debt.

·      Indian markets may open negative following the cues from the Asian markets. We may see volatile markets ahead of the IIP data today. Impact of increase in interest rates has to be seen on the production data. Decline in the food inflation for the fourth week in a row to a one-year low will provide some support.

Key events today

·      Closing of FPO of Power Grid Corporation of Indian Ltd. (subscribed 9.72x as of November 11, 5PM)

Economic and Corporate Developments

·      Food price index rose 12.30%, while the fuel price index climbed 10.67% for the week ended 30 October 2010 against prior week’s 12.85% and 10.67%, respectively.

Buzzing Stocks

·       Sun Pharmaceutical Industries has acquired the 12 per cent stake of Mark Mobius-headed Templeton Asset Management in its Israeli subsidiary, Taro Pharmaceuticals, for $82 million (`3.64 bn).

·       State-run Indian Oil Corp's northern India Panipat refinery should be operating at 300,000 barrels per day within 10 days, the company's head of refineries, BN Bankapur, said.

·       Mahindra & Mahindra is looking for a new manufacturing plant to cope with a massive rise in demand. The tractor major had scaled up its production capacity by over 60% in two years.

·       Metal and mining major Vedanta Resources Plc said it is considering listing of its energy arm Sterlite Energy and the Zambian copper unit to unlock value for stakeholders and raise funds.

·       Union Bank of India said it plans to raise $200 million (about `9bn) from the overseas market in the next one month through a bond issue.

·       Parsvnath Developers has bagged a prime 38-acre railway land in the heart of the national capital for `16.52 bn, by outbidding Indiabulls in an auction.

·       Tata Steel plans to raise $1 billion in December selling shares with differential voting rights, or DVRs, the second from the group after Tata Motors, said two people familiar with the plans.