18 November 2010

India Morning Note - Keynote Capitals (November-18-'10)

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Views on markets today
·        Indian markets slides to lowest close in nearly 2-months on Tuesday after heavy sell-off in the Shanghai Composite Index on renewed talk of further monetary tightening in China. Worries that US funds will close positions in emerging market stocks ahead of the year-end to cash in on recent gains, also added to the decline. All the sectoral indices ended in the negative terrain with real estate, metals and capital goods stocks were the worst hit. Lead products manufacturer Gravita India debuted and closed at `210 against issue price of `125.
·        Market breadth was weak at ~0.25x as investors sold large cap stocks. FIIs sold equities worth `1.96bn while domestic institutions bought equities of `4.49bn.
·        Asian markets are mostly higher on Thursday in sluggish trade consolidating after recent falls, in spite of an uninspiring session in the US markets on Wednesday. Hong Kong shares rebounded early Thursday after falling in six of the previous seven sessions, with financials and mainland Chinese resource stocks pacing the advance in line with bounces at the Shanghai and Shenzhen bourses.
·        Indian markets will open positive today following the cues from the Asian markets. However, recent uncertain global cues may resist markets to remain strong. Banks and financial services stocks may see interest after the announcement Axis Bank's Enam buyout deal.
Key events today
·        Opening of the IPO of R.P.P. Infra Projects Ltd. (price band `68-75 per share), closes November 22.
·        Announcement of food and fuel price inflation data
Economic and Corporate Developments
·        The RBI has revised its projections for India’s GDP growth in FY11 to 8.5% from 8.4%.
Buzzing Stocks
·        Axis Bank will acquire Enam Securities’ key businesses such as investment banking, institutional and retail broking, and distribution of financial products in an all-stock deal.
·        Anil Ambani Group firm Reliance Infrastructure (R-Infra) has approached the Supreme Court against its disqualification from MSRDC's Rs 21 bn contract.
·        M&M plans to expand its automobile biz in the US after sealing acquisition of a majority stake in the South Korean automobile major Ssangyong.
·        Honda would invest Rs 10 bn on the production facility in a phased manner of which Rs 5 bn will come in the first phase.
·        Law ministry has opined that UK’s Cairn Energy cannot sell stake in its Indian unit to Vedanta Resources without government nod for transfer of control in all its properties including the giant Rajasthan oilfields.
·        State-run power utility NTPC may set up a cement plant in a joint venture with National Aluminium Co, NTPC chairman said.
·        Orissa government asserted that Posco would not pull out of the state despite the halting of work on the proposed Rs 510 bn steel project.
·        Sterlite Technologies and optical cable solutions provider Jiangsu Tongguang Communication said they will form a joint venture company in China.
·        US-based Amarillo Bio-sciences Inc (ABI) said Indian pharmaceutical major Zydus Cadila will be marketing its dietary supplement Maxisal domestically and also in Nepal.

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