| News & Aanalysis | Price Targets & Recommendations | Companies List | Message Board | Newsletter |
|
News
>>
BRIC
>>
India
>>
Indian stock market morning report by Keynote Capitals (October 16, 2008, Thursday, 7.00 a.m. GMT) 16 October 2008 Source: www.keynoteindia.net
- The rupee fell sharply this morning, to 49.00/15 per USD, from yesterday’s close of 48.525/540, following a crash in US and Asian markets, prompting fears of capital outflows from Indian markets. - RBI yesterday cut the CRR (cash reserve ratio) by 100 basis points to 6.5%, which would release Rs40000Cr ($8.2 billion) into the banking system. - Centre for Monitoring Indian Economy (CMIE) has scaled down the FY09 GDP forecast for India from 9.4% to 8.7%. - Nifty stock index futures fell 6% in Singapore this morning, giving strong indications that local market would see a further correction today. - HCL Technologies, which has $1.9bn worth of forward covers @ Rs41.06, will halve them by December, its executive vice president for finance said on Wednesday. This will help the company benefit from the depreciating rupee which currently trades at 49 per USD. - The rights issue of Hindalco Industries has been subscribed upto 55.97%, according to provisional data, and underwriters and founders would cover the balance. - The Kingfisher-Jet alliance seems to be working overtime to cut costs. The alliance will return 15 narrow-bodied aircraft to leasing companies after their leases end later this year and in 2009. Industry experts said this could mean the withdrawal of around 75 flights a day, or around 8% of the combine’s daily domestic flights. In the meantime, Air India has rejected the offer to join the alliance. - XL Telecom & Energy has set up a 1.6 MW solar power plant in Spain at a cost of ? 9.5mn. Key Event today The Union Cabinet will take up FDI cap hike in insurance today. The Bill aims to increase the FDI limit in domestic insurance companies from the 26% to 49%. Results to be announced today HDFC Bank, Sasken, Biocon, GTL, Indusind Bank, NIIT Tech, Peninsula Land, Mphasis, Finolex Inds US markets overnight The US markets declined by 7.9% yesterday, the biggest fall since the 1987 crash, following disappointing retail sales data and continued credit concerns. Consumers continue to curtail spending in the face of economic headwinds. Retail sales in September fell 1.2% month-over-month, its 3rd consecutive monthly drop and the largest decline in 3 years. The equity stakes government is acquiring in 9 investment banks come with no guarantee that investments will spur lending and unfreeze credit markets. Nor do they give government board seats or any other leverage to demand that firms actually use the money to help the economy. Although credit markets showed signs of improvement, there are concerns that recovery will take longer than expected. Dollar Libor, the rate banks charge each other for short-term dollar loans, slightly declined but remains at highly elevated levels. This indicates banks are willing to lend to each other, but are still showing extreme caution. In addition, there was a high demand for Treasuries as investors seek safety. 3Q profit of JP Morgan Chase & Co. fell 85% on write downs for mortgage-related assets. Net income dropped to $527mn or 11 cents a share from $3.4bn or 97 cents, a year earlier. Crude fell to a 13-month low, settling at $73/barrel on recession concerns. OPEC cut its 2009 demand forecast because of worsening financial market conditions. The Producer Price Index, an inflation reading, fell 0.4% in September due to a decrease in commodity prices. Views on markets today Following the US market’s cues, Asian markets plunged sharply today. The worst performing sectors are exporters, shipping and metals. Indian markets are likely to follow suit. Yesterday, the Sensex corrected by 5.9%, while this morning Nifty futures listed in Singapore Stock Exchange fell by 6%. The fears of liquidity crisis forced the RBI to reduce CRR again by 100bps. This would inject Rs40000Cr into banks. With this, the RBI has made available additional money of Rs100000Cr to banks. The Government has also announced an immediate release of Rs25000Cr to banks on account of the farm debt waiver and relief scheme. Larsen & Toubro's (L&T) results disappointed the markets yesterday. It reported net profit of Rs460Cr, 6.8% below estimates. HCL Technologies (HCL) reported a bottom line below estimates by 2.7%. HDFC Bank will announce its results today. We may see some momentum in the stock. Inflation data to be released post market, in our view will keep markets volatile. Falling crude prices is however a positive for the markets. However, currently markets are focusing on the global events and we may see another bottom today. |
|
