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Indian stock market morning report by Keynote Capitals (June 5, 2009, Friday, 7.00 a.m. GMT)

Views on markets today

- On a late recovery in the latter half of the trading session, the Sensex closed above the crucial 15000 level. The Government's push to reforms reflected in the speech by India's President, coupled with lending rate cuts by leading banks helped markets rally. Real estate, capital goods, pharma and power stocks saw buying.

- Market breadth was strong at 3x led by all over buying in large and mid cap stocks. FIIs were net buyers of Rs465Cr, while domestic institutions sold equities worth Rs530Cr.

- Asian markets are up today led by the rally in energy and resources stocks amid rising commodity prices. US Fed said that the recession is fading, which also helped markets gain.

- In the wake of positive global cues, we expect positive opening for the Indian markets today. Inflation at 0.48% and interest rate cuts by major banks will certainly add to investor confidence.

Economic and Corporate Developments

- The Indian Rupee (INR) moved up to 47.10/11 per USD this morning, stronger than its previous close of 47.20/21.

- Wholesale price index based inflation rose by 0.48% for the week ended May 23, compared with 0.61% for the previous week.

- ICICI Bank has announced a reduction of 0.50% in its Floating Reference Rate (FRR) applicable to floating rate retail loans (incl. floating rate home loans) effective today. The revised FRR will be 12.75% p.a. as against 13.25% p.a. at present. ICICI Bank has also reduced its Benchmark Advance Rate (I-Bar) by 0.50% from 16.5% at present to 15.75%.

Buzzing Stocks

- Jain Irrigation Systems has received an order worth Rs77.8Cr from the World Bank for an irrigation project in Tamil Nadu.

- The MCX Stock Exchange plans to divest 18% of its equity to Indian banks, according to its promoter Financial Technologies.

- Vedanta Group plans to raise Rs100bn debt to part fund the expansion of its aluminium project in Orissa.

- Gujarat NRE Coke, through its subsidiary, Gujarat NRE Minerals intended to acquire Australia-based Rey Resources Ltd in an all stock deal.

- Subhash Projects has bagged two orders worth Rs105Cr from NTPC for construction related works.

- Orbit Corporation plans to raise Rs500Cr through a private placement of shares to qualified institutions investors.

Results to be announced today
Indiabulls Real Estate, Jyothy Laboratories, Cosmo Films, Fame India

US markets

US markets were up overnight led by gains in financial and energy related stocks. Surge in the oil and commodity prices helped energy and resource stocks to gain. Expectations of improvement in net interest margins due to lower credit costs for banks and financial companies attracted investors to buy the stocks financial companies. Energy and resource stocks witnessed fresh buying due to increase in crude prices and expectations that it will move to $75 per barrel. However, investors seem to be cautious ahead of the jobless claims data on Friday.