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Indian stock market morning report by Keynote Capitals (June 9, 2009, Tuesday, 7.00 a.m. GMT)

Views on markets today

- After a positive opening, the Indian markets saw a major correction on profit taking by investors, with the Sensex closing lower 2.9% over previous close. Major losers were primarily real estate stocks, while metals stocks also witnessed huge selling. However, IT stocks outperformed the markets.

- Market breadth was fairly negative at 0.25x led by the selling in large cap and frontline stocks. FIIs and the domestic institutions sold equities worth Rs14Cr and Rs876Cr respectively yesterday.

- After a positive opening, Asian markets are weak today, as investors are cautious about the near term outlook of the global economy and lack of fresh triggers. Metal stocks declined after the weakness in the metal prices reported yesterday. Semiconductor and technology stocks, however witnessed buying.

- We expect a weak opening for the Indian markets today following the cues from the world markets. Investors are awaiting fresh triggers. FIIs are still in the buying mode, which is a major positive. However, continuous selling from the domestic institutions is a concern.

Economic and Corporate Developments

- The Indian Rupee (INR) is near a 2-week low of 47.67/70 per USD, weaker than yesterday's close of 47.555/565.

- NYMEX Crude Oil (CL) is currently trading at $68.50 per barrel.

Buzzing Stocks

- Moody's Investor Services has lowered the rating of Tata Steel from Ba2 to Ba3, though with stable outlook

- Aegis BPO is setting up a technology subsidiary with an investment of $100mn, to be invested over the next 12 months. The company will provide end-to-end customised solutions in the areas of voice and data, networking, unified communications, managed services, info security and remote infrastructure management.

- Power Trading Corporation PTC to float $500mn power fund; eyes coal assets abroad. It has identified undeveloped mines in Australia and Indonesia.

- Areva T&D has won four orders worth about Rs3.5bn from Power Grid Corp., to be completed in partnership with Larsen and Toubro.

- Pantaloon Retail plans to raise up to Rs10bn in long-term funds through sale of shares to investors. The company is also considering absorbing its wholly owned unit, Home Solutions Retail (India).

- European specialty chemical major Lanxess has acquired the chemical and wind power assets of specialty chemical manufacturer, Gwalior Chemicals, for an aggregate value of Rs536Cr.

- The Government has imposed an extra levy between $17.52 and $63.84 on imports of 1,000 pieces of compact discs-recordable (CD-Rs) from countries like Iran, Thailand and Korea. Moser Baer - a stock to watch.

Results to be announced today
NOCIL, VIP Industries

US markets

The US markets overnight ended flat (up 1.36 points). Financials bounced back from an early decline. JP Morgan, American Express and Bank of America were the 3 biggest gainers. Supreme Court temporarily halted the sale of Chrysler to Italy's fiat after an Indiana pension fund and consumer groups petitioned the high court. Bullish news that Nobel Prize winning economist, Paul Krugman, is calling for the recession to end by September and a surge in bank related stocks pushed stocks off their lows.

Financial stocks ahead of Fed's official announcement regarding which companies will be allowed to repay TARP funds. Financials spent most of the session as the only major sector in positive ground, but saw their gains compound as buying intensified after the broader market moved past its afternoon highs. That prompted many short-sellers to quickly cover their positions.

Apple unveiled their much anticipated 3rd generation iPhone whose basic version will sell for less than $100. Semiconductor giant Cisco showed weakness, but managed to close at unchanged mark in its debut session on Dow. Monday marked the 1st session that Travelers traded in the blue chip index. The 2 stocks replaced shares of GM and Citigroup in the Dow.

Treasuries continue to grapple with sellers. In turn, benchmark 10-year Note was knocked roughly 17 ticks lower, which pushed its yield to 3.89% from 3.86% Friday. Treasuries will remain in focus today as participants prepare for a $35bn auction of 3-year Notes.