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Indian stock market morning report by Keynote Capitals (June 16, 2009, Tuesday, 7.00 a.m. GMT)

Views on markets today

- Indian markets closed negative yesterday on profit taking in metal and oil and gas stocks. Capital goods and real estate stocks too were under pressure. Only FMCG stocks saw some buying. All in all, profit taking is evident by the selling in sectors which had seen a major rally over the last month or so.

- Market breadth was fairly negative at 0.4x. FIIs and domestic institutions were net sellers, selling equities worth Rs412Cr and Rs587Cr respectively.

- Following the cues from weak US markets, Asian markets opened lower today. Investors sold banking, commodity and energy stocks.

- Indian markets may open negative today as well, tracking the Asian markets. FIIs were net sellers yesterday, which is a concern. However, some recovery is possible at lower levels.

Economic and Corporate Developments

- The Indian Rupee (INR) is close to a 3-week low this morning, at 47.90/91 per USD, weaker than Monday’s close of 47.72/73.

- NYMEX Crude Oil (CL) is currently trading at $70.13 per barrel.

- According to the Royal Bank of Canada, the global economic crisis has bottomed out and positive indicators have begun to emerge. There are encouraging signs for global recovery as the US economy was showing signs of recovery after worst-ever declines in its GDP in the last quarter of 2008 and the first quarter of 2009. Due to low interest rates, an easing in credit crunch and Obama's fiscal stimulus package, the US housing market is already showing some stability. This, coupled with rising consumer confidence, hints at a moderate recovery for the US economy by the second half of 2009.

- Reliance Communications, India's second-largest mobile operator, added 2.4mn users in May, taking its total mobile subscribers to over 77mn. Reliance Communications had 74.8 million mobile users as of April.

- BHEL has demanded levy of 10% import duty on import of equipment for projects awarded through international competitive bidding route and mega power plants.

- Coal India will import 4mn tonnes of coal in FY10. It will produce 435mn tonnes of coal in FY10, up from 403.17mn tonnes in the previous year.

- ATF prices have been raised. ATF will now cost Rs3,949 more in Delhi at Rs36,252 per kilolitre, while in Mumbai it will rise to Rs37,367 per kilolitre.

Buzzing Stocks

- Ansal Properties and Infrastructure has approved raising Rs15bn via a QIP. Its board will also seek shareholder approval for issue of securities worth Rs25bn by way of public issue or other issues from time to time. It also approved raising the foreign institutional investors (FII) investment limit from 24% currently to 49%.

- The Bombay High Court has directed Reliance Industries to sell gas to RNRL @ $2.34, vis-?-vis the Government approved price of $4.2; the order settles issues of quantum, tenure also. The order estimated to have a negative impact of close to Rs500bn for 17 years for Reliance Industries.

- GAIL India plans to invest Rs55.58bn in FY10. The major portion will be earmarked for the pipeline projects.

- Deep Industries has bagged 2contracts worth Rs72Cr from ONGC for hiring natural gas compressors.

Results to be announced today
Power Grid Corp., RCF, Jagran Prakashan

US markets

US markets tumbled 2.1% on a weaker-than-expected manufacturing report and falling commodity prices. The markets fell to June lows by logging its worst single-session percentage loss in one month. Wal-Mart was cut to neutral by Goldman Sachs further fueling the pessimism. Economic news disappointed the markets yesterday after the empire state manufacturing index plunged to -9.41 in June vis-?-vis -4.55 last month. Meanwhile, a survey of home builders' confidence also dropped in June. Chrysler is building vehicles for the first time since filing for bankruptcy on April 30, as it reactivated a plant. The pre-bankruptcy restructuring of GM has proven lucrative for some of the company's law firms.

Key data announcements today
Housing Starts
Producer Price Index
Industrial Production