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Indian stock market morning report by Keynote Capitals (May 26, 2009, Tuesday, 7.00 a.m. GMT)

Views on markets today
- Indian markets remained highly volatile yesterday on the news of the North Korean nuclear test. Consumer durables, real estate, pharma and FMCG stocks witnessed buying while technology stocks dragged markets down.
- Mid cap and small cap stocks outperformed large caps.
- Market breadth was strong at around 8x. Both FIIs and domestic institutions were net buyers, buying equities worth Rs728Cr and Rs198Cr respectively. Trading volumes on the NSE declined from Rs203bn to Rs188bn yesterday, while it increased on the BSE from Rs71bn to Rs73bn. Deliverable volumes on top 10 traded stocks on the BSE increased substantially due to strong deliverable volumes in Suzlon Energy, while a moderate decline was witnessed on the NSE in deliverable volumes in the top 10 traded stocks.
- Asian markets are mixed today. Japanese markets witnessed profit taking, while the Hang Seng saw buying after a weak opening.
- Indian markets may open weak on the uncertain global cues. Markets may remain volatile and directionless, pending clear policy decisions by the new Central Government.

Economic and Corporate Developments
- Tracking the US dollar’s strength vis-?-vis other currencies, the Indian Rupee (INR) weakened to 47.43/44 per USD, weaker than its previous close of 47.28/30.
- NYMEX Crude Oil (CL) is currently trading at $60.92 per barrel.
- Rio Tinto Group has agreed to a 33% drop in contract prices for iron ore with Japan’s Nippon Steel Corp., to about $61 a ton, for its benchmark product in the year started April 1.

Buzzing Stocks
- Ranbaxy may take $50mn hit on delay in supply of key ingredient to UK-based AstraZeneca to make Nexium
- HCC board approves Rs15bn fund raising programme
- Dolphin Offshore inks JV with US company for deepwater offshore services
- HCL Infosystems bags Rs2.4bn order from BSNL
- GHCL board approves merger of wholly owned subsidiary Colwell and Salmon with itself
- Ahmednagar Forgings is making preferential issue of up to 1.83mn warrants convertible into equivalent number of fully paid equity shares, to promoter group companies, and cancel the outstanding 3.8mn warrants of the company and forfeit the amount paid thereon.
- Tantia Constructions has been awarded the project of constructing the Bridge over River Damodar in Bowichandi - Khana section of BDR Gauge Conversion Project of SE Railway in Kolkata worth Rs 58.15Cr.
- Stocks up on Q4 earnings:
-- Jet Airways India posted a net profit of Rs53Cr for the March quarter ended March, versus a year-ago loss.
-- Rural Electrification Corp earned a net profit of Rs3.88bn on net sales of Rs13.37bn.
-- Tourism Finance Corp: FY09 net profit rose by 1/3rd to Rs28.97Cr

Results to be announced today
Tata Communications, Cummins India, NIIT Tech

US markets

The US markets were closed yesterday in observance of Memorial Day. A day of mourning where hundreds of people listened to tributes paid to the nation's fallen warriors.

With the Government's June 1 restructuring deadline approaching, GM still has a lot of ground to cover to avoid filing for bankruptcy. With GM rapidly burning through its cash reserves due to hefty losses amid an historic slump in auto sales, President Obama said Treasury Department would give the automaker the cash it needs to continue operations on the condition that GM restructure its debt or file for bankruptcy by June 1. The automaker set a May 26 deadline for its bondholders to reach a restructuring agreement. Rival Chrysler, which has also received billions of dollars from the federal government, filed for bankruptcy last month despite reaching a deal with the UAW, after several bondholders held out of the restructuring agreement.