Views on markets today

- The Indian markets saw yet another round of selling yesterday amid weak global cues and heavy selling by FIIs. The Sensex recorded its 2nd consecutive fall, led by the drop in real estate, metal and power stocks, while IT stocks outperformed. Mid and small cap stocks suffered more, as they saw profit taking after the rally over the last few weeks.

- Market breadth was fairly low 0.25x driven by the decline in mid and small cap stocks. FIIs were net sellers yet again, selling equities worth Rs585Cr, while domestic institutions supported the markets by buying equities worth Rs539Cr.

- While deliverable volumes on top 10 traded stocks dropped on the NSE they increased on the BSE. Increase in the deliverable volumes on the BSE was led by JP Associates while Reliance Capital, DLF and Reliance Infrastructure witnessed weak deliverable volumes.

- Asian markets are positive today taking the cues from the US markets. Rebound in the metal and shipping stocks and strong buying in the technology stocks helped markets to recover.

- We expect a positive opening for the Indian markets following the cues from the global markets. The markets may remain volatile due to the selling from FIIs. RBI's stand after the fall in inflation is still unclear. However, markets do not expect a rate cut as the inflation fall was mostly due to higher base.

Economic and Corporate Developments

- The Indian Rupee (INR) rose marginally this morning to 48.16/17 per USD, compared with yesterday's close of 48.21/22.

- NYMEX Crude Oil (CL) is currently trading at $71.47 per barrel.

- WPI-based inflation fell to -1.6% in for the week ended June 6, as compared with 0.13% in the week before.

- Domestic steel producers JSW Steel and Essar Steel are likely to ramp up production at mills in North America, which have been running at less than half the capacity. This follows ArcelorMittal’s decision to hike US sheet prices by $80-90/ tonne, with immediate effect.

- India may allow private traders to import tax-free white sugar and will extend raw sugar imports without an obligation to export whites beyond July 31 to improve sugar supplies.

- Sebi has announced removal of entry load on mutual fund investments.

Buzzing Stocks

- The Government is unlikely to dilute its 57% stake in gas transmission and marketing company GAIL India.

- Essar group plans to raise $900mn via a 2 ½ year loan, by pledging a part of its stake in Vodafone Essar, the country's third-biggest mobile firm.

- Jaiprakash Associates raised Rs5bn through the sale of 25mn treasury shares in a block deal.

- Promoter holding in Great Offshore has reduced to nil, after the withdrawal of Mr. Pankaj Pandey, Maltrar Trading and Investment Co. and Delta Housing Co. from the promoter group.

- Indowind Energy proposes to invest Rs1bn to generate 30MW of wind energy in FY10. It plans to raise authorised share capital to Rs2bn.

- Ackruti City has denied media reports that its $500mn QIP has been delayed. The company claims that the proposed QIP is on the right track.

Results to be announced today
Marico, Himatsingka Seide, ABG Shipyard, Man Inds.

US markets

The US markets cracked a 3-day losing streak and managed to end in green 0.7% on back of positive economic news from job, confidence and manufacturing figures. Jobless claims had the first decrease since January, Confidence Board's index of leading indicators climbed, and Philadelphia Fed Report indicated a slowing in the decrease of manufacturing. These positive signals triggered wide spread buying. In specific sectors, Tech and consumer stocks were lower, while banks rebounded.

The market was buzzing on treasury announcement of a record $104bn worth of bond auctions for next week. Treasuries were knocked sharply lower after the Treasury Department announced a series of auctions for next week. The auction will carry amounts that exceed what was expected, which pressured benchmark 10-year note and sent its yield up above 3.8%. However, Obama's financial reform measures were met with resistance as Treasury Secretary, Geithner, struggled with direct answers to the law makers questions.

Encouraging economic reports

- Latest jobless claims report indicated that 608,000 initial claims were filed for the week ending June 13. In weekly jobless claims, even as the initial claims nudged higher, continuing claims dropped for the 1st time since January this year to 6.69mn. Initial claims were in-line with expectations and continue to trend lower, but continuing claims made a surprise pullback from record highs.

- The Philadelphia Fed reported that its index of manufacturing conditions improved to -2.2 against -22.6 in May.

- Leading indicators rose for a 2nd consecutive month, climbing 1.2% last month, the largest gain since March 2004.