News & Analysis » India

Indian stock market morning report by Keynote Capitals (June 3, 2009, Wednesday, 7.00 a.m. GMT)

Views on markets today

- Amid volatility, the Sensex ended moderately up yesterday. Mid cap and small cap stocks outperformed the Sensex. FIIs and domestic institutions both were net sellers of Rs233Cr and Rs424Cr respectively. Auto, consumer durables and metal stocks rallied while real estate and power stocks saw a profit taking.

- Market breadth was tight at 1.5x. Mid and small cap stocks witnessed positive breadth while it was negative with large cap stocks. Deliverable volumes in top ten traded stocks were up on both exchanges. NSE witnessed a moderate upside in deliverable volumes, while those on the BSE jumped from 18% to 29% due to higher deliverable volumes in Essar Oil. Reliance Capital and HDIL traded on weak deliverable volumes.

- Asian markets are up today backed by positive US housing data and fresh buying in commodity stocks.

- We expect a positive start for the Indian markets following the global cues. However, the Sensex witnessed a resistance at 15000 levels yesterday which in our view is crucial. The markets may remain volatile for the short term, before the Union Budget.

Economic and Corporate Developments

- The Indian Rupee (INR) strengthened to a 7-month high of 46.83/84 per USD, its strongest since Nov. 5, and above its previous close of 47.02/03.

- NYMEX Crude Oil (CL) is currently trading at $68.53 per barrel.

- FCCB Buybacks
-- Bajaj Hindusthan has repurchased FCCBs aggregating to face value of $17.92mn, for cash at a discount, of the $119.50mn outstanding. After the repurchase, the total outstanding FCCBs will be 101.57mn.
-- HEG, a leading manufacturer of graphite electrodes, has bought back FCCBs worth $3mn, of the total outstanding of $11.05mn. Of the issue size of $28.75mn, FCCBs worth $17.70mn have already been converted into Equity. After yesterday’s buyback, the Company’s outstanding FCCBs stands at $8.05mn.

- SAIL’s domestic sales has increased by 12% to about one million tonnes for May (y-o-y).

- Nomura Group is set to acquire a 35% stake in LIC Mutual Fund, after Life Insurance Corporation (LIC) approved a proposal to induct Nomura as a strategic partner in the mutual fund business.

Buzzing Stocks

- Essar Oil decides to raise around $500 million through the QIP route as part of its $2 billion fund-raising programme.

- Punjab National Bank will raise Upper Tier II Bonds as PNB Upper Tier II Bond Issue Series IX through an issue size of Rs500Cr.

Results to be announced today
NALCO, DCM Shriram Consolidated

US markets

Recovery in the US housing data and the dollar’s weakness against world's major currencies helped the US markets gain overnight. However, flow of equity offerings from financial companies dampened the sentiment for financial stocks.

The housing data for April shot up by 6.7% highest in last 7 ? years, suggesting that the situation is improving. Manufacturing stocks continued to gain on the improved sentiment.