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Indian stock market morning report by Keynote Capitals (September 30, 2008, Tuesday, 6.00 a.m. GMT) 30 September 2008 Source: www.keynoteindia.net
- The rupee hit 47.11 to the USD yesterday, the lowest since June 2003. The currency and bond markets are closed today for half-yearly book-closing of banks. - Chinese buyers of Indian iron ore are defaulting on import contracts and refusing to lift the ore unless the seller offers a discount on contracted prices. China accounts for around 75% of India's annual iron ore exports of about 100 tonnes. Chinese buyers are willing to pay 45% less than the prevailing rates in June. A slowdown in Chinese demand is a negative for iron ore exporters Sesa Goa, Resurgere Mines & Minerals and MSPL. - Infotech Enterprises is eyeing an acquisition worth $40mn in Germany for its design engineering business. - Auto ancillary company Banco Products India has finalised contracts with three US-based auto wholesalers in the July-September quarter, and expects sales of $1.5mn from the US market in FY09. The management has given a revenue growth guidance of 25% in FY09, driven by exports and contribution from the domestic industrial segment. - One stock that stands out in the ongoing bloodbath is FMCG major Hindustan Unilever, which yesterday hit a new 52-week high of Rs265 intra-day. - Orchid Chemicals and Pharmaceuticals has entered into an arrangement with US drug maker Merck & Co., for the discovery and development of novel anti-infective drugs, which has a revenue potential of over $100mn. - XL Telecom is investing ?35mn in its wholly-owned subsidiary Saptashva Solar S.L. It is also investing Rs28Cr in another wholly-owned unit Khandoba Distilleries Ltd. - Subex has signed a 3-year framework contract with BT Group Plc worth $50mn. - Aksh Optifibre has entered into a 3-year agreement with Sony Pictures Entertainment to bring Hollywood content for icontrol (Aksh's IPTV Service), a television connection allowing viewers to control television programmes with over 130 channels, value added services like Video on Demand etc. - IVRCL has won a Lift Irrigation Project worth Rs418.50Cr, to be completed in 36 months. - Ballarpur Industries is raising paper prices from October 1. US markets overnight The US markets posted its worst one-day decline of 7.1% in the past 21 years, after the House of Representatives rejected the Emergency Economic Stabilization Act (proposed $700bn financial relief plan). The worst performing sector was financials that fell 15.9%. This spread fear that US economy will suffer if credit markets do not improve. The Congress is expected to work on a new plan to ease financial market turmoil, though it is not clear how long it may take. US banks reluctant to lend The TED Spread i.e. difference between what banks charge each other for 3-month dollar loans (3-month Libor) and what US government pays for 3-month loans (3-month T-bill) rose to 3.55%, the highest level since 1984 and indicates banks are reluctant to lend to each other. US crisis warranted Europe bailout The tremors from U.S. credit crisis reverberated around the world as European governments stepped in to bail out Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG. Commodities and Crude prices fall Commodities fell 5.9% and crude futures fell 10.7% to $95.48 per barrel on global economic concerns. View on markets today After the overnight blood bath in the US markets, Asian markets have opened weak this morning. However, after the initial weakness they have recovered to some extent. Back home, India has signed a nuclear deal with France. However, the nuclear deal with the US is still in the pipeline. No major events are expected today. We may see initial weakness in the markets; however we expect a recovery, as markets seem to be oversold. Technical view The Sensex saw another sharp decline yesterday on continued concerns in the US. In our view, the Sensex has not yet bottomed out. We expect the weakness to continue today in the initial trading sessions but a short recovery is possible as the Sensex has been trading negative for last 4 sessions. |
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