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Indian stock market morning report by Keynote Capitals (June 17, 2009, Wednesday, 7.00 a.m. GMT)

Views on markets today

- After a weak opening, the Indian markets recovered on buying in bank, PSU and power sector stocks. Domestic institutions supported the markets at the bottoms. Oil and gas and technology stocks witnessed selling.

- Market breadth was positive at 1.6x. FIIs sold equities worth Rs728Cr while domestic institutions bought equities of Rs158Cr.

- Asian markets are mixed today. While the Nikkei is up on recovery, the Hang Seng has opened lower following the US markets. Poor US economic data stalled the gains on the Nikkei; the rally was mostly due to a recovery after a 3-day fall.

- We may see a cautious opening for the Indian markets today. We may see some profit taking as FIIs were net sellers over last two days.

- Reliance Industries and ONGC may see momentum as oil prices fell close to $70/barrel for the fourth day and on issues of gas pricing. Yesterday, the Bombay High Court asked Reliance to sell gas to Essar Group.

- Falling metal prices may weaken metal stocks particularly Hindalco and Sterlite Industries.

Economic and Corporate Developments

- The Indian Rupee (INR) turned weak this morning, slipping to 47.85/86 per USD, weaker than yesterday's close of 47.75/76.

- NYMEX Crude Oil (CL) is currently trading at $70.56 per barrel.

- India's steel minister favours duties on cheap imports of steel to protect the domestic industry. Indian steel companies have said cheap imports and dumping have cut into their sales and profitability.

Buzzing Stocks

- The Government has asked Reliance Industries to sell natural gas from its eastern offshore KG-D6 fields to steel firms like Essar and Ispat.

- IVRCL has bagged several orders together valued at Rs4.32bn.

- Sesa Goa plans to raise about Rs5.8bn through issue of shares to its promoters and associates.

- Unitech plans to assign a capital expenditure of Rs100bn for its telecom venture in the next three years to roll out its telecom services across the country.

- Greenply Industries new Laminate unit situated at Solan in Himachal Pradesh has started commercial production in one press with effect from June 11, 2009 out of a total of three presses proposed to be installed.

- Jubilant Organosys is considering divesting its non-core business, performance polymers division. This will help it reduce debt by Rs2-3bn. It had a net debt of Rs34.8bn as of May 31, 2009, accrued mainly due to capital expenditure and two large acquisitions in the past two years.

- Opto Circuits India plans to develop a single-product special economic zone (SEZ) at Hassan at an investment of close to Rs1.5bn. The company intends to set up a manufacturing facility to produce a new range of products.

Results to be announced today
GSFC, Trent, Wire & Wireless India

US markets

The US markets ended in red 1.3% as retailers and commodity producers led the decline. Broad based nervousness prevailed despite crushingly positive Housing Start figures and good news out of Palm. Palm's new Pre phone is selling better than expected and it seems to be the wireless sector's "most valuable asset" threatening Apple's iphone dominance. US financials slipped and dragged the markets lower.

Economic data

US housing starts surged 17.2% month-on-month to an annualized rate of 5,32,000 in May after sliding 12.9% in April. Building permits, meanwhile, climbed 4.0% to an annualized rate of 518,000. Both numbers bounced more than expected from record low levels. Still, investors remain mindful that a meaningful and sustainable upturn in residential construction activity is unlikely to come about quickly.

Producer prices rose at a slower pace at 0.2% while core prices dropped 0.1%.

Industrial production fell 1.1% in May, after a 0.7% drop in April.

Economic event lined up for the day is the May Consumer Price Index report.