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Indian stock market morning report by Keynote Capitals (November 20, 2008, Tuesday, 7.00 a.m. GMT) 20 November 2008 Source: www.keynoteindia.net
- The slew of bad news continues across the world and across industries. While auto makers General Motors and Toyota have announced plant shutdowns and output cuts, chemical manufacturer BASF has not only cut its revenue forecast and plans to keep 80 plants idle, due to reduced orders. Swiss Life plans to cut jobs next year, in order to save costs. - The deputy chairman of the Planning Commission, Montek Singh Ahluwalia has said the government would soon draw up an estimate for additional spending on infrastructure projects. He estimates that India needs $500bn investments to upgrade its infrastructure in the five-year period ending March 2012, to sustain a 9% GDP growth. - Organisation for Economic Cooperation and Development (OECD) has given a negative outlook for FDI pattern in India and said that inflows and outflow will be down by 13% and 6%, respectively, by the end of the year. - The rupee opened at a record low of 50.50 per USD. It had closed at 50.02/03 yesterday. - In view of the declining international prices of crude oil, Reliance Industries has sought approval from the government to start selling petrol and diesel again. RIL was forced to shut its petrol stations down last year, as it could not match the prices at which PSU oil companies sold petroleum products. - GAIL (India) plans to import one to two cargoes of liquefied natural gas (LNG) in Q1 of 2009. - In spite of the slowdown in the automobile sector, Maruti Suzuki India expects new models to help it exceed last year's production and sales volumes. However, the country’s largest car maker is worried about adverse economic conditions. - Some of the upcoming hotel projects in India are likely to be delayed or put on hold, on account of the global economic meltdown. The industry expects that 20-30% of the room capacity to be added by 2010, to be deferred by 2-3 years. US markets The US markets closed sharply down by over 5% overnight. Concerns over the fate of Citigroup and auto makers pushed the Down Jones Industrial Average (DJIA) to its five-year low. It closed below the crucial 8,000 level. The Citigroup stock plummeted by its greatest ever one day percentage drop, by 23.4%. Consumer prices dipped by a record 1% in October 2008, driven by the 8.6% drop in energy costs. FOMC expects the US economy to contract for as much as a year, and that the slowdown could persist for even longer. Views on markets today - After a steady opening, Indian markets declined sharply in the afternoon session yesterday. The fall was driven by weak European markets and the negative opening of DJIA futures. FIIs were net sellers of equity worth Rs265Cr yesterday, as per the provisional data released by BSE and NSE. - Asian markets are weak today following the US market cues. Technology, financials and consumer electronic stocks are the draggers. - Back home, RBI would conduct a special 14 day repo auction of Rs567bn to meet liquidity needs of MFs. RBI expects to make recast of realty loans tougher, rollover to attract NPA tag. Buzzing Stocks - SAIL and Rashtriya Ispat Nigam (RINL) are considering scaling down production after a surge in inventory. - Maruti Suzuki has cut production at Gurgaon plant by 5%. - Citigroup has put iits 40% stake in Polaris on the block, in talks with potential players. - RIL plans to re-open retail fuel outlets. - TCS has emerged as the lowest bidder at Rs1677Cr to bag E-governance deal. - L&T Capital ups stake in Kalindee Rail Nirman to 14.76%, no plans of open offer. - Unitech is set to sell properties to meet loan repayments and land payments over the next few months. - Asian Paints, India’s biggest paint producer, on Wednesday said that it has temporarily closed the company’s chemical plant in Gujarat that makes phthalic anhydride (PAN). - HCL tech and Xerox announce strategic global alliance We may see weak markets today with volatility. Inflation data to be released today, may only add to the volatility. |
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