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Indian stock market morning report by Keynote Capitals (October 17, 2008, Friday, 7.00 a.m. GMT) 17 October 2008 Source: www.keynoteindia.net
- The rupee opened strong this morning at 48.59/60 per USD, compared to 48.82/83 yesterday. - Crude oil prices fell for a third straight day plumbing a 13 ? month low near $72 per barrel, as commodity investors yet again rushed for the exit on fears of a collapse in demand growth, with the world economy tilting toward recession. - The RBI’s measures for infusion of liquidity seem to be paying off, as call rates touched a low of 5.65%. - A dramatic slowdown in consumer durables and auto loans has slowed down the over-all retail credit growth from over 23% in the year to June 2007 to around 14% for the year to June 2008. - Tata Steel has announced that its Corus unit would cut crude steel production by up to 20%, or 1mn tonnes over the next three months due to slowing demand. - Reliance Power plans to acquire more coal mines in Indonesia. - Jindal Drilling & Industries has bagged an order for Rs810Cr, for leasing its rig to ONGC. The rig has been contracted for three years, effective from October 15. - Hindustan Construction Co. (HCC) has won two orders worth Rs3338Cr from Andhra Pradesh government in consortium with other firms, with its share being Rs1688Cr. - Bajaj Auto is likely to cut two-wheeler production due to slowdown in motorcycle sales. - The CCEA has approved private equity firm Providence Equity Partners’ Rs2704Cr purchase of a 20% stake in Aditya Birla Telecom Ltd (ABTL), a unit of Idea Cellular. - Emami has acquired a controlling stake in Zandu Pharmaceuticals for Rs242Cr for an 18.18% stake from the Parikh family. Results to be announced today HDFC, Satyam Computer, Goa Carbon, India Infoline, EClerx Services, Mysore Cements US markets overnight The US markets rose for the first time in three days ending up 4.7% as crude fell to around $72 / barrel yesterday, which sparked a rally in consumer companies, while prospects of government bailout for bond insurers reversed a slide in financial shares. Financials ended up 1.7%. Citigroup and Merrill Lynch posted 3Q losses of $2.8bn and $5.15bn respectively. Airlines fared well; Southwest Airlines and Continental Airlines both announced better-thanexpected 3Q results, helping lift Amex Airline Index 21%. On the economic side, filings for jobless benefits declined 16,000 to 461,000. Industrial production for September fell 2.8%, which is far worse than the estimate of 0.8%. It was also the largest decline since 1974. Inflation was steady as the core rate for CPI dropped to 0.1% in September and will probably stay at that level, or even drop to zero for next few months. Total CPI was flat and may well be flat to down for several more months given the drop in energy prices. Views on markets today The Asian markets opened mixed today, following the overnight positive close of the US markets. A weakened yen and the bounce back in the financial and steel companies helped the Nikkei recover by around 2%. However, the Hang Seng is weak. In India, the aviation industry was the major news maker yesterday. Jet Airways has rolled back its decision on the retrenchment of the staff while Kingfisher Airlines cut its losses. In our view markets has a few small positives. On the macro-economic front declining inflation is a positive. The WPI based inflation has declined from 11.8% to 11.44% this week. Falling crude prices is another positive. Analysts expect crude prices to move towards $35/barrel over the long term, which may also provide a one more tool to the Indian government and the RBI to tackle the inflation problem. The market in our view has reacted positively to the financial results of HDFC Bank, which reported a bottom line of Rs528Cr which is 2.8% above of the consensus estimates. Two important results are to be announced today viz., NBFC major HDFC and IT major Satyam. We may see the momentum in these stocks. While with positive opening, profit taking in the mid and closing session is possible. |
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