| News & Aanalysis | Price Targets & Recommendations | Companies List | Message Board | Newsletter |
|
News
>>
BRIC
>>
India
>>
Indian stock market morning report by Keynote Capitals (September 29, 2008, Monday, 6.00 a.m. GMT) 29 September 2008 Source: www.keynoteindia.net
- The rupee fell closer to the 47 per USD mark in early trade this morning. - SBI will offer interest rate of 10.5% p.a. on deposits of 1000 days, effective October 1. - The Indian banking sector has apparently suffered mark-to-market losses of around Rs400Cre due to its investment in instruments of troubled US financial giants Lehman Brothers and AIG, 75% of which is accounted for by ICICI Bank alone. - HCL Technologies has made a counterbid for Axon Group, a cash offer at 650 pence per share, which is higher than the 600 pence per share bid by Infosys Technlogies. - Suzlon Energy is making a rights issue of equity shares upto Rs1800Cr. The rights entitlement ratio, the issue price, record date, etc. will be announced in due course. IDFC Private Equity will acquire a 17.1% equity stake in SE Forge Ltd., a wholly owned subsidiary of the company, for upto Rs400Cr. - The guidance by Lakshmi Machine Works, India’s leading manufacturer of textile machinery, of a reduction of 10-15% in sales for FY09, indicates that the next two quarters may be weak for textile companies. LMW feels that it will take at least 6 months for demand to pick up again. We expect LMW and textile stocks to continue their underperformance, though the weakening rupee vis-?-vis the USD may bring relief to garment exporters. - Binani Cement plans to raise $90mn by next March to double its manufacturing capacities in China and Dubai (each with capacity of 1mn tpa) by 2010. The company is also considering setting up grinding units in Africa. - Aban Offshore has signed an agreement with Husky Oil China for deployment of the jack-up rig Deep Driller 5 offshore China for a 3 firm wells + 3 optional wells programme. The estimated revenues from the Contract (with an estimated duration of approx 180 days) would be approx. $38.7mn, or Rs178Cr. - Educomp Solutions has signed an agreement with Department of State Education Research & Training (DSERT), Government of Karnataka for implementation of Computer aided Education in 1571 Schools in Karnataka. The order is valued at Rs109Cr, to be executed over 5 years. - Royal Orchid Hotels plans to invest Rs500Cr for expanding its luxury and four-star hotel and service apartment chain in India. It currently operates 12 hotels, and plans to add 8 properties by 2010. US markets overnight While the failure of Washington Mutual is the largest bank failure in US history, its fallout may be limited, with JP Morgan Chase acquiring deposits, assets and certain liabilities of its banking operations for $1.9bn. On this news, the US markets closed up 1.1% on Friday. Global bank HSBC Holdings cut 1,100 jobs or 4% of its workforce because of the crisis. US economy expanded @ 2.8% in 2Q, slower than previous estimate of 3.3%, as consumer spending and trade added less to growth. Housing market weakness, consumer spending retrenchment, labor market deterioration, slowing foreign demand and credit crisis are all playing into slowing economic activity. Congressional leaders and the White House agreed yesterday to a $700bn rescue of the ailing financial industry. The biggest bailout in US history goes to the House for a vote later today. View on markets today The Asian markets have given a lackluster response to the announcement of bailout package from US government. After opening higher the major Asian indices shed all gains today. However, in spite of announcement of bailout package the crude and commodity prices showed weakness. We believe the bailout news is already discounted in crude and commodity prices. We expect Indian markets to respond cautiously today as Asian markets seem to have given a thumbs-down to the bailout package. However, we may see some stock specific action in the Infosys and HCL Technologies stocks and power stocks. Both are battling for UK based Axon. Power stocks may see momentum as the nuclear power deal is on the table of US Congress. Technical view The Sensex is witnessing weakness with high volatility. Volatility indicator viz., Bollinger Bands’ width is expanding which indicates increasing volatility in the Sensex. While the movements of the Sensex on the lower band indicate weakness may to remain for next few days. Short term indicators viz., Stochastic and Williams %R are witnessing pressure on every rally. We expect the weakness to continue today as well. |
|
