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Indian stock market morning report by Keynote Capitals (May 15, 2009, Friday, 7.00 a.m. GMT)

Views on markets today

- Indian markets saw a mixed trend yesterday. While large cap indices led by the Sensex followed weak global cues and closed negative, mid and small cap indices were up on buying. Real estate and auto stocks were up; however they could not help arrest the slide. Oil and gas and technology stocks were a drag.

- Market breadth was tight at 1x. FIIs sold equities worth Rs302Cr while domestic institutions bought equities worth Rs254Cr. Trading volumes declined considerably yesterday, from Rs160bn levels to Rs130bn levels on the NSE and while on the BSE it went down by half. Deliverable volumes on both exchanges were weak. Real estate stocks rallied yesterday on weak deliverable volumes, while Reliance Capital continued to trade on weak deliverable volumes.

- Asian markets are up today after the rally in overnight US markets. Japanese machine orders data which was above expectations helped markets gain.

- We expect Indian markets to open positive. However, domestic factors such as political developments ahead of the election results may lead to volatility.

Economic and Corporate Developments

- The rupee (INR) rose this morning to 49.60/63 per USD, stronger than the previous close of 49.78/79.

- NYMEX Crude Oil (CL) is currently trading at $58.74 per barrel.

- WPI based inflation index rose by 0.48% in the week ended May 2, from 0.7% in the previous week.

Buzzing Stocks

- According to moneycontrol.com, ONGC has terminated Great Offshore's rig order worth Rs10bn due to lapse of deadline. Since Great Offshore had apparently given the rig development order to Bharti Shipyard, the latter too may be severely impacted in case this news report is true.

- BHEL has bagged an order worth Rs14.75bn for supply of main plant package for the greenfield power project of 600 MW thermal power plant in Chattisgarh.

- Eveready Industries is buying out France’s rechargeable battery maker Uniross SA from CG Holding for a total consideration of Rs60Cr.

- NTPC entered into a loan agreement with SBI for Rs85bn to finance its new projects.

- DLF aims to raise Rs100bn over the next three years from asset sales as to cut down its debt.

Results to be announced today
Ashok Leyland, Oracle Financial, Abhishek Ind., Chambal Fertilisers, Blue Star

US markets
US markets ended in positive territory 0.6% despite terrible jobless claim figures and continued concern over the financial sector. Positive earnings news from a large player in the software sector combined with a steep decline in the LIBOR rate triggered aggressive buying that counteracted the negative news. Shares of retailers finished 0.3% higher. Wal-Mart slipped after posting in-line earnings, which were also on par with what the company had already forecast.

Economic data

Total April PPI increased 0.3% month-over-month, while Core PPI increased 0.1% month-over-month.

Continuing claims climbed more than expected to a record high of 6.56mn.

Weekly initial claims rose by 32,000 last week and also topped expectations by totaling 637,000. With jobless claims mounting, many expect consumer spending to remain challenged. Such a notion was supported in the prior session when advance retail sales data for April showed an unexpected decline.

Key announcements today
- Consumer Price Index
- Empire State Mfg Survey
- Industrial production
- Consumer Sentiment