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Indian stock market morning report by Keynote Capitals (June 2, 2009, Tuesday, 7.00 a.m. GMT)

Views on markets today
- Indian markets continued the bull run yesterday, driven by real estate, metal, IT and FMCG stocks.
- Market breadth was strong at 4x. Trading turnover declined marginally on both exchanges.
- On the economy front, exports declined 33% in April. India's leading banks ruled out a drastic cut in lendingrates. The Indian Banks Association said that the banks could cut rates only by 50-100 bps against the industry demand of 400-500 bps.
- Reflecting the renewed global demand, crude oil witnessed biggest monthly gain in May.
- Asian markets are positive today after strong US manufacturing data overnight and fading uncertainties after the bankruptcy of General Motors. Most of the auto stocks made huge gains.
- We expect a positive opening for the Indian markets following cues from global markets. However, we may see profit taking at higher levels.

Economic and Corporate Developments
- The Indian Rupee (INR) came off its 5-month high this morning, to 47.09/10 per USD, weaker than its previous close of 46.94/95.
- NYMEX Crude Oil (CL) is currently trading at $68.47 per barrel.
- India’s exports fell 33% in April 2009 (y-o-y), with recession in advanced economies adversely impacting foreign demand for Indian manufacturers. Imports fell sharply by 37%, mainly because of a fall in oil prices. With imports declining at a faster rate than exports, the trade deficit narrowed 50% to $5bn in April 2009. However the Purchasing Managers' Index based on a survey of 500 companies, rose to 55.7 in May from April's 53.3 reflecting strength in underlying domestic economy.
- The Indian telecom industry saw a dip in the number of new subscriber additions in April - 11.75mn connections compared to 15.87mn in March. However, the total wireless subscribers (GSM, CDMA and wireless local loopfixed) base reached at 403.66mn.
- According to the textile minister, the $52bn Indian textile sector will require Rs300bn of annual investments to achieve a growth rate of 8-10% p.a. The Government will provide a fiscal stimulus to the industry.
- Cement shipments in May :
Aditya Birla Group 3.18mn tonnes, up 19.5% y-o-y
Ambuja Cements 1.64mn, up 8.3% y-o-y
- The Indian Government has imposed anti-dumping duty of up to $1.90 per piece on the imports of compact fluorescent lamps (CFL) to guard the domestic industry from cheap Chinese and Vietnamese shipments. This move should benefit listed players like Havells India, Surya Roshni, Asian Electronics.

Buzzing Stocks
- Take Solutions has signed a major deal with leading South Korean Pharma major IL-Yang Pharma Co. Ltd., for providing Investigational New Drug (IND) submission services. The purpose of the IND Submission is to gain FDA non-objection to studying investigational agent in humans.
- HDIL has entered in to a joint venture with Mumbai Metropolitan Region Development Authority (MMRDA) for development of 525 acres of land under Rental housing scheme at Virar. As per the arrangement Company will develop approximately 13mn sq ft of rental space and hand it over to MMRDA free of cost and remaining approximately 39mn of sq ft space will be available to the Company for free sale.
- Videocon Industries has allotted 11.76mn warrants to Bennett, Coleman & Company Ltd. (BCCL) with an option to BCCL to subscribe to 11.76mn equity shares within 18 months from the date of allotment at a price of Rs 170 per equity share.
- The Ministry of Information and Broadcasting has given approval to Adlabs Films for the transfer of operations of the FM radio license to Reliance Unicom (RUL), pursuant to the Scheme of Arrangement for the demerger of radio business of Adlabs Films.

Results to be announced today
HPCL

US markets
US markets were positive yesterday on hopes that the global and US economies are making a strong comeback. Strong manufacturing data from China yesterday and from US overnight helped market sentiment. After General Motors bankruptcy filing, investors feel uncertainties may be over. The US manufacturing growth in May showed a better than expected contraction. Financial stocks rallied.