Indian stock market morning report by Keynote Capitals (July 1, 2009, Wednesday, 7.00 a.m. GMT)
Views on markets today
- Sensex stocks witnessed sharp declines yesterday led by real estate, metal, power and capital goods stocks. The correction was particularly pronounced in sectors which are interest rate sensitive. Mid and small cap stocks too corrected sharply, underperforming the Sensex. Investors remained cautious ahead of the Union Budget and avoided long positions.
- Market breadth was fairly negative at 0.4x led by the large cap stocks. Both FIIs and domestic institutions remained buyers, buying equities worth Rs108Cr and Rs198Cr respectively.
- The markets were flooded with a few economic releases and key economic numbers yesterday:
-- Infrastructure sector output grew 2.8% in May from a year earlier, slower than 5% in April. Output had risen 3.1% in the same month last year. During April-May, the output rose 3.9%, up from 2.7% in the same period last year.
-- India's fiscal deficit in April-May was at Rs907.58bn ($18.9bn), or 27.3% of the full-year target. In February, the Government had forecast fiscal deficit at Rs3.33tn or 5.5% of FY10 GDP.
-- India's current account surplus improved to $4.75bn in Q4-FY09 from a revised deficit of $13.03bn in Q3-FY09.
-- According to the Industry Secretary, India's May industrial output growth is expected to be better than April's expansion as cement and housing sectors show signs of improvement.
- The Nikkei opened on a weak note this morning after the negative overnight close of the US markets. However, the Japanese market recovered after the release of Bank of Japan's quarterly tankan survey of business sentiment showing that the outlook of large manufacturers in Japan improved for the first time since December 2006. However, the improvement was still below expectations. The Hong Kong market is closed today for the anniversary of the territory's handover to China by Britain.
- We expect a weak opening for the Indian markets, which appear to have turned cautious ahead of the budget next Monday. Both FIIs and domestic institutions have taken long positions over last few days, which is a relief. Inflation for the week ended June 20 is to be announced today. Inflation recorded a negative growth of 1.14% as per last week’s announcement.
Economic and Corporate Developments
- The rupee (INR) latest quote: 47.90 per USD
- NYMEX Crude Oil (CL) is currently trading at 70.68 per barrel.
- Consolidated PAT of Hindalco Industries for FY09 declined 78% on weak demand and derivative losses. The company proposes an issue of shares worth up to $500mn to fund expansion, to be completed in 6 to 8 weeks. Aluminium sales and prices in the June quarter were better than in the previous quarter, and the company believed the worst for the sector was behind it. Hindalco is trebling capacity to 1.7mn tonnes by 2013 at a cost of Rs250bn ($5.2bn).
Buzzing stocks
- HCC has priced its Rs4.8bn QIP issue @ Rs102.15 per share.
- Two-wheeler sales of Hero Honda Motors grew 23.7% y-o-y in June, to 365,734 nos.
- L&T has bagged two orders in Hydrocarbon sector worth Rs651Cr from HPCL Mittal Energy Ltd. and MRPL.
- Indian Oil Corporation plans an investment of over Rs600bn for raising its refining capacity to 80 million tonnes per annum by 2011-12 from 60.2 million tonnes at present.
- BHEL has bagged order worth Rs170Cr from Chennai Petroleum Corp. for setting up a 20 MW Gas Turbinebased co-generation power plant in Manali, near Chennai.
US markets
Negative sentiment from the June Consumer Confidence figure weighed heavily on the stock market leading the US markets to end in red 1.0%. Additional unexpected bad news arose from the Foreclosure arena further pushed stocks into the red. Consumer confidence and expectations readings disappointed. June consumer confidence missed expectation and came in at 49.3 and marked a decline from the previous reading. Expectations index also missed the consensus estimate. The Volatility Index VIX spiked higher for the 1st time in 6 days as traders scrambled for derivative insurance against further market declines. The financial sector shrugged off yesterday 1.1% loss to finish the quarter with a 44% gain.
Economic data to be released today
Construction Spending
ISM Manufacturing Index
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| Latest Indian Stock Market Reports |
Indian stock market and companies daily report (March 22, 2010, Friday)
The Indian indices opened marginally positive but maintained a trend of directionless trade, as they gyrated in a narrow band for most of the session. Volatility ruled the roost until mid-session, as the markets traded with minor, updown swings, although they sustained in the green. The markets slipped in the red in the final session, but a sharp recovery, led by benchmark heavyweight Reliance Industries, helped the indices close at their day’s highs. Both the Sensex and the Nifty gained 0.3% each, while the BSE Mid-cap and Small-cap indices registered gains of 0.1% and 0.4%, respectively. Among the front-liners, Bharti Airtel, RCom, Hero Honda, SBI and HUL were up by 1-4%, while HDFC, DLF, M&M, TCS, and ICICI Bank were down by 1-2%. In the mid-cap segment, Kirloskar Oil, United Breweries Holding, HSBC Investdirect, Deccan Chronicle and Apollo Tyres were up by 5-8%, while Motilal Oswal, Novartis, Carborundum, REI Six Ten Retail and IBREL were down by 3-5%.
Indian stock market and companies daily report (March 19, 2010, Friday)
The Sensex slipped into the red soon after initial gains, hitting a fresh day's low in mid-morning trade. The market recouped its entire losses later. The Sensex hit a fresh intraday low in afternoon trade as Asian stocks fell. The key benchmark indices surged to the day's highs at the fag end of trade after global rating agency Standard & Poor's (S&P) revised India's rating outlook to stable from negative. S&P affirmed the 'BBB-' long-term and 'A-3' short-term sovereign credit ratings on India. Capital goods, FMCG stocks fell. Auto stocks were mixed. Banking and metal stocks rose. Stocks were volatile as traders rolled over positions in the derivatives segment from the March 2010 series to the April 2010 series, ahead of the expiry of the near-month March 2010 contracts on Thursday, 25 March 2010. Both the Sensex and Nifty gained 0.2% and 0.3%, respectively, while the BSE Mid-cap and Small-cap indices also gained 0.4% and 0.1%, respectively.
Indian stock market daily morning report (March 19, 2010, Friday)
The Sensex closed marginally positive, extending its gains for the third successive day yesterday, after global rating agency Standard & Poor's upgraded India's outlook from negative to stable, saying the country's fiscal position could begin to recover and the economy would remain on a strong growth path. Bank, IT and metal stocks supported the market while FMCG and capital goods stocks capped gains.
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| Indian Stocks Recommendations |
Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang, 8 December 2009
JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
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Indian Banking fortnightly report (February 2010), 15 March 2010
Indian Union Budget review 2010-2011, 6 March 2010
Indian Auto Sector Update, 6 March 2010
Indian Economic Survey 2010, 25 February 2010
Indian railway budget 2010 analysis, 24 February 2010
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