Views on markets today

- Indian markets moved lower Friday on selling by domestic institutions and correction in real estate, auto and technology stocks. Metal and oil and gas stocks saw buying. Even better IIP results could not help markets recover.

- Market breadth was negative at around 0.4x. Mid and small cap stocks underperformed their large cap counterparts. FIIs bought equities worth Rs469Cr and domestic institutions sold equities of Rs251Cr.

- Asian markets are down today due to decline in chipmaker stocks. Property stocks witnessed some interest of investors. Markets are not finding direction due to lack of triggers. Investors are waiting for positive US economic indicators to push the markets upward.

- Volatility has became the order of the day for the Indian markets. The Sensex is witnessing resistance around the 15,500 level. However, continued FII buying is a positive. We expect a negative opening with volatile and directionless trading today.

Economic and Corporate Developments

- The Indian Rupee (INR) opened weaker this morning at 47.84/85 per USD compared with Friday's close of47.61/62.

- NYMEX Crude Oil (CL) is currently trading at $71.37 per barrel.

- Signs of revival in the retail real estate market are emerging, with doubling of home loan approvals in April and May by LIC Housing Finance. Loan defaults in FY10 are seen below 1%, from 1.07% in last year.

- According to the head of Prime Minister's economic advisory council, the worst may be over for India’s economy, as India's industrial output rose by 1.4% in April y-o-y, after declining three times in the previous four months. The growth in April showed signs of recovery.

- Chinese import prices of India-origin ferro-chrome continued to rise last week on strong demand, tight supply and expectations that South African FeCr prices will rise further. Import prices for India-origin FeCr (6-8% C, 58%-60% Cr) were at 69-72 cents/lb CIF China. 1-2 cents higher than prices of 68-70 cents/lb a week ago.

Buzzing Stocks

- According to industry sources, Wockhardt is close to selling France-based Negma Laboratories and Irelandbased Pinewood Labs. Pfizer may acquire Wockhardt's biotechnology and veterinary division.

- Indian Hotels to buy a stake in Elel Hotels for Rs680Cr. Elel Hotels is the holding company of Sea Rock Hotel. The buyout to be funded via rights issue proceeds.

- Bombay High Court to pronounce final judgment on RIL-RNRL case today.

- Suzlon seen in talks to sell Hansen stake.

- Hindalco in talks with lenders to recast bank covenant.

- Nalco has raised aluminium prices by Rs5000/tonne.

- SREI Infrastructure Finance plans to raise Rs40bn in FY10 to fund growth. The equipment finance company expects loan disbursements to rise 20% to Rs75bn and expects net interest margin at 3.6-4% in FY10.

- Shriram EPC's Oriental Green Power has achieved Rs4bn financial closure for 6 bio-mass based power plants. Leitner Shriram proposes to invest further Rs80Cr in expansion of its wind turbine generator manufacturing facility near Chennai.

- Lanco Infratech has won two orders worth Rs3.19bn from Maharastra State Electricity Distribution Company.

Results to be announced today
Shipping Corp. of India, Power Finance Corp., Page Inds.

US markets last Friday

The US markets surged 0.3% last Friday on the back of gains in defensive sectors like pharmaceuticals. Investors shrugged off disappointing consumer-sentiment data. Consumer Confidence hit a 9-month high pushing shares into positive territory at the close. In other corporate news, the Treasury announced that 10 of the 19 largest US financial institutions, including US Bancorp, JPMorgan Chase and Goldman Sachs, will be allowed to repay $68bn of TARP funds. In the financial sector, investment fund BlackRock plunged 5.97% to $171.69 after announcing that it would buy British bank Barclays' investment arm for $1.35bn.

Key data announcements today
Empire State Manufacturing survey