Views on markets today

- Weak global markets, uncertainties on government policies about reforms and worries that the government may bring lock in for FII investments pulled down the Indian markets. Real estate, metal, PSU and oil & gas stocks saw huge selling.

- Market breadth was fairly negative at around 0.3x. FIIs were net sellers for the third consecutive day. They sold equities worth Rs364Cr while domestic institutions bought equities of Rs569Cr.

- Deliverable volumes in the top 10 traded stocks declined slightly from 18% to 17% on the NSE, while it showed moderate improvement on the BSE from 16.9% to 17.6%. L&T and Reliance Industries witnessed some strength in the deliverable volumes while Reliance Natural Resources traded on weak deliverable volumes.

- Asian markets are negative today on strong yen and weak exporter stocks. Investors sold equities as the due to uncertainties about the prospects of global recovery.

- We expect a cautious but negative biased opening for the Indian markets led by the weak global cues. WPI based inflation is expected to fall for the first time in at least three decades by the week ended June 6. Inflation is expected to decline by 1.52%. Falling inflation may further push RBI for interest rate cuts.

Economic and Corporate Developments

- The Indian Rupee (INR) strengthened today to 48.08/09 per USD, from yesterday's close of 48.13/14.

- NYMEX Crude Oil (CL) is currently trading at $71 per barrel.

- In a bid to restart the disinvestment process, the government is planning to sell up to 10% of its stake in the state-owned Coal India Ltd (CIL) by the end of this year.

- Future Capital Holdings Ltd, in accordance with the directions of the Hon'ble High Court of Judicature at Bombay, equity shareholders have approved the Composite Scheme of Amalgamation and Arrangement of Future Capital Credit Ltd and Future Capital Holdings Ltd and Future Capital Financial Services Ltd and their respective shareholders and creditors with an overwhelming majority of the members.

Buzzing Stocks

- Hindalco is close to buy Australian coal mine in a deal estimated at for Rs.385 crore.

- Fortis Healthcare has emerged as the lead bidder to acquire a part of Wockhardt Hospitals after Apollo Hospitals Group retracted its plans to buy three of the 12 hospitals owned by Wockhardt Chairman Habil Khorakiwala and family.

- Omaxe Infrastructure & Construction Pvt Ltd, a 100% subsidiary of Omaxe Ltd has bagged construction contracts worth Rs128.34Cr from U P Projects Corporation Ltd (a UP Government Undertaking).

- IRB Infrastructure Developers Ltd had submitted its Bid with the NHAI for design, engineering, finance, construction, operation and maintenance of four lanning of NH 4A from Goa / Karnataka Border Km 84 to Panaji - Goa Km 153.07 with total length of 65.07 Km in the State of Goa under NHDP Phase III on BOT basis. The Project is on grant basis with concession period of 30 years and estimated cost of the Project is Rs800Cr. IRB Infra has emerged as the lowest bidder for the project. IRB has sought a grant of Rs 186.3Cr for the project from NHAI.

- Wockhardt has sold its German subsidiary Esparma to another German company, Lindopharm GmbH, a move that is in line with its plan to divest non-core businesses for Rs120Cr.

Results to be announced today
Dish TV, TV Today, Zee News, Opto Circuit

US markets

The US markets slightly declined 0.1%. Bank stocks dragged the indices lower after S&P's cut its credit rating on 18 banks and lowered its outlook on 4 other banks. Focused on consumer protection, proposals did little to oversee the rating agencies and other prime sources of the meltdown. Outdoor clothing retailer, Eddie Bauer declared chapter 11 bankruptcy further adding to the negative sentiment.

Financial stocks came under sharp pressure in the early going and finished 2.6% lower. US Bancorp, along with several other firms, announced that they have redeemed the preferred shares that they issued to the Treasury under the TARP program, which was aimed at helping capitalize banks amid turbulent economic and credit conditions. In the wake of that mess, Obama announced sweeping reform measures for the financial markets yesterday.

Economic events
- Mortgage applications fell 15.8% to 514.4 last week, the lowest in nearly seven months.
- Trade deficit fell nearly 35% to around 101 billion dollars in the 1Q, the lowest since the 4Q of 2001 during the last recession.
- Consumer prices edged up marginally higher, up 0.1%.

Events lined up for the day
Jobless Claims
Leading Indicators