News & Analysis » India

Indian stock market morning report by Keynote Capitals (June 8, 2009, Monday, 7.00 a.m. GMT)

Views on markets today

- Amid choppy and volatile session, the Sensex closed marginally positive (up 0.63%) on Friday. Capital goods stocks lead the rally while FMCGs and real estate stocks witnessed selling.

- Market breadth was tight at around 1.2x. Trend in the institutional turnover was mixed. FIIs bought equities worth Rs832Cr while domestic institutions sold equities of Rs430Cr. Deliverable volumes in top 10 traded stocks on the BSE declined from 29% on Thursday to around 20% on Friday. On the NSE it remained around 23%. Reliance Industries and ITC witnessed strong deliverable volumes and JP Hydro, weak deliverable volumes.

- Asian markets are mixed today. The Nikkei was up on gains in exporters stocks due to weaker yen and better than expected US job loss data. However, the Hang Seng is down on volatile crude oil prices.

- We expect a positive opening for the Indian markets following hopes of recovery for the US economy. However, markets may remain volatile ahead of the union budget next month.

Economic and Corporate Developments

- The Indian Rupee (INR) turned weak this morning to 47.28/30 per dollar, compared to its Friday's close of 47.1050/1150.

- NYMEX Crude Oil (CL) is currently trading at $67.92 per barrel.

Buzzing Stocks

- GMR Infrastructure is making a QIP on June 9 to raise Rs50bn, leading to equity dilution of around 10-11%.

- Jet Airways may defer its orders for 10 Boeing 787 Dreamliner aircraft.

- ANG Auto and TowerWorx USA have entered into a JV to produce and market Mobile Towers solutions in India. ANG Auto and TowerWorx USA have a 50% stake each in the new company Towerworx India (P) Ltd.

- 3i Infotech will set up a wholly owned BPO subsidiary, which will provide services to the BFSI and Telecom companies in the domestic market.

Results to be announced today
CESC, Sadbhav Engineering

US markets last Friday

The US markets last Friday ended marginally up, by 0.2% as a surprisingly strong monthly jobs report was countered by concerns that higher borrowing costs could derail the tentative economic recovery. The jobless rate spiked to levels not seen in 25 years and consumer borrowing plummeted depressing stocks. Additional negative news of the Federal funds future contracts pricing in a 70% chance of an interest rate increase by the end of 2009 further dampened spirits. There were worries about potential threat from inflation going forward, as the government has been pumping money at a rapid clip over the past several months to revive economic growth.

After Friday’s close, it was announced that an appeals court ruling has cleared the way for Chrysler to exit bankruptcy, probably Monday afternoon. The ruling allows Chrysler to sell a majority of its assets to a new company to be called the Chrysler Group. The new company will be owned primarily by a United Auto Workers union trust, Italian automaker Fiat and the US government. Meanwhile, GM said that it will sell its Saturn brand to car dealership operator Penske Automotive Group. GM will reportedly help finance private equity firm Platinum Equity's purchase of bankrupt auto parts supplier Delphi Corp.

Economic events

Labour Department said that US companies cut about 345,000 jobs from their payrolls in May. The reading surpassed economists’ expectations of 520,000 job cuts. The unemployment rate rose to 9.4%, a 26-year high, from 8.9% in April. Economists were expecting it to rise to 9.2%. Experts remain divided on whether the worst is over for US labor market. In particular, bankruptcy filings of Chrysler and GM could result in more job losses over the next few months.