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Indian stock market morning report by Keynote Capitals (October 3, 2008, Friday, 6.00 a.m. GMT) 3 October 2008 Source: www.keynoteindia.net
- The rupee dropped to its lowest level since May 2003, opening at 47.30/31 to the USD this morning. - The Finance Ministry expects the RBI to go slow on rate tightening, but does not anticipate a lowering of banks' CRR in the near future. - British software company Axon Group Plc is accepting the higher offer from HCL Technologies (?441mn), over that from Infosys Technologies (?407mn). - Engineering and power stocks NTPC, BHEL, L&T, Alstom Projects are in the limelight on account of the nuclear bill being passed in the US senate. - Emami raised the open offer price for Zandu Pharmaceuticals shares from Rs15,000 to Rs16,500. - Steel pipe-maker Welspun Gujarat Stahl Rohren expects robust demand for pipes this fiscal year, as high oil prices result in a spurt in oil exploration opportunities. - Liquor firms are likely to be hit by an increase in the price of alcohol, which has almost doubled to Rs40-45 per litre in the last six months due to a shortage of molasses caused by a lower sugarcane crop this year. - Everest Kanto Cylinder has got a $13mn order from Pakistan and Middle East countries to supply CNG cylinders through EKC International, its Dubai-based unit. - Welspun India has deferred plans of overseas acquisitions due to adverse market conditions that have impacted consumer spending in Europe and the US. Welspun will focus on growing domestic retail sales and maintain sales levels in the US and Europe. US markets overnight The US Senate passed the bailout bill but this did little to cheer sentiment in the markets, which closed down 3.2%. The markets dropped as a jump in borrowing costs and reports showing a worsening economy spurred concerns that bailout plan will not be enough to stimulate growth. There were concerns after the bill is passed that short selling ban extended to certain stocks may expire 3 business days after its enactment. Other reason for the fall was discouraging economic data. Weekly jobless claims rose exceeding consensus which continues to suggest weak job market while August factory orders showed worse-than-expected decline of 4%. Crude fell 4.6% settling at 93.97 / barrel. Views on markets today In spite of the Senate's approval to the bailout package, the bears were back in action. Asian markets too have followed suit this morning. A strengthening yen due to fears for US economy has pulled down share prices of Japanese exporters. Back home, India is celebrating the approval of nuclear deal from the US Senate which may bring some momentum in power sector stocks today. HCL Tech and Infosys are again in the news as Axon Technologies choose HCL Tech as a preferred bidder. However, Infosys has 60 days for making a counter offer. Falling crude prices have brought some relief to oil marketing companies and refiners. We expect some weakness in the markets today, in line with global sentiments. Technical view The Sensex closed positive on Wednesday, yet again amidst sharp volatility. The Sensex witnessed a strong resistance at 13,200 level. Short term indicators viz., Stochastics and Williams %R are positive and moving up. However, the rally does not look convincing as the medium term indicators like MACD are still weak. We may see volatility continue today as well, with some weakness after rally for 2 days. Low deliverable volumes even in the top traded stocks is a cause for concern, indicating that it is only the speculators who are in the fray, and investors are keeping away from the markets. |
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