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Indian stock market morning report by Keynote Capitals (October 31, 2008, Friday, 7.00 a.m. GMT) 31 October 2008 Source: www.keynoteindia.net
- The rupee gained this morning, rising to 49.50 per USD, 0.4% above Wednesday's close of 49.69/70, on hopes of the stock market rally continuing today as well. - Crude oil prices stand at $64.45 per barrel. - Inflation has cooled off further, to 10.68% for last week, from 11.07% for the week preceding. - According to the Finance Minister, the global slowdown will have an indirect effect on the Indian economy; however he does not expect this to result in massive job losses. - Indian bond yields fell to an 8 1/2 month low of 7.46% today, on expectations that policy makers may take fresh steps to combat tight liquidity conditions in the money market. - Suzlon Energy’s order book as of date: Rs14,052Cr (domestic orders of Rs1,261Cr + export orders of Rs12,791Cr). The order book for its component business is Rs1080Cr. The above order book positions do not include the orders of Hansen and REpower. - Suzlon Energy has decided to drop plans to invest in a new tower manufacturing facility. Accordingly its capex plan is reduced by Rs669Cr. - Sun TV Network has decided to defer a decision on share buy-back, due to volatile conditions in the stock market. Results to be announced today Bharti Airtel, Reliance Communications, DLF, HDIL, Unitech, IOC, India Cements, IVR Prime Urban US markets overnight The swings in US markets continued yesterday, although a last minute rally helped it to close up 2.1%. The FOMC slashed interest rates to just 1%, hoping to shore up consumer confidence and prop up a sagging economy. The Fed also opened dollar swap lines with the likes of Mexico, South Korea, and Brazil. On the economic front, US GDP saw biggest Q3 contraction in 7 years. US 3Q GDP shrank 0.3% vis-a-vis growth of 2.8% in 2Q, the biggest decline since 2001. However, it was above estimates of 0.5-0.6% contraction in GDP. US consumer spending remains a concern for economic growth as it dropped 3.1% against expectation of 2.4% drop. US consumer spending dropped for the 1st time since 1991. Initial jobless claims for the week ending October 25 were unchanged at 479,000 against expectation of 475,000. The jobless data coincides with continued reports of layoffs from major corporates. American Express is the latest to make cuts to its workforce, eliminating 7,000 jobs. Views on markets today The Asian markets are trading mixed today. The Nikkei and the Hang Seng have both opened lower with a gap. However, both have recovered from their respective lows. Markets are awaiting the Japanese central bank's decision on interest rates. Indian markets were closed yesterday. We may see some action in the markets today, backed by some positive as well as negative news flows and the announcement of financial results from major companies. On the positive side, inflation continues its downward journey and came down to 10.68%. This is a major positive in the current liquidity crunch scenario. Falling crude and commodity prices can aid the declining trend of inflation. However on the negative front, a few major corporate announced disappointing results. ONGC reported a drop of 5.7% in its Q2FY09 net income, which was 27.2% below street estimates. Jindal Steel reported a net profit of Rs4.5bn, again below consensus estimate of Rs4.9bn. We may see some movement in these stocks. Volatility may continue, in anticipation of the earning announcements of a few major companies incl. telecom majors Bharti Airtel and Reliance Communications, real estate majors DLF, HDIL, and Unitech, and oil and gas major IOC. |
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